Here is a collection of insightful quotes from trading legend, Larry Hite.
No matter what information you have, no matter what you are doing, you can be wrong.
One of the great things about the market is, the markets don’t care about you. The market doesn’t care what color you are. The markets don’t care if you are short or tall. They don’t care about anything. They don’t care whether you leave or stay.
… the beautiful thing about the markets, they don’t like you, they don’t dislike you, they just don’t care. They are there everyday. You want to play, you can play. You don’t want to play, don’t play.
We approach markets backwards. The first thing we ask is not what can we make, but how much can we lose. We play a defensive game.
There are just four kinds of bets. There are good bets, bad bets, bets that you win, and bets that you lose. Winning a bad bet can be the most dangerous outcome of all, because a success of that kind can encourage you to take more bad bets in the future, when the odds will be running against you. You can also lose a good bet, no matter how sound the underlying proposition, but if you keep placing good bets, over time, the law of averages will be working for you.
For more background on Larry Hite and Mint, click here.
In his post-Oscar interview, Martin Scorsese made the following comment:
“The winning for me, I got to tell you, is making the pictures.”
Take a look at this collection of wonderful street art from Mark Jenkins.
Also, I don’t know whether it’s commitment or insanity, but some dedicated fans of ‘Lost’ have created Dharma Initiative food labels that can be downloaded as pdfs.
“A monkey was carrying two handfuls of peas. One little pea dropped out.
He tried to pick it up and spilt twenty. He tried to pick up the twenty and spilt them all. Then he lost his temper, scattered the peas in all directions and ran away.” – Fables, Leo Tolstoy
In the latest edition of Trader Monthly, professional gambler Johnny Chan has written an interesting article about knowing when to walk away. Here are some quotes:
Early in my career, I used to have a problem with quitting when I was behind. It was very hard for me to leave a game a loser. A lot of that was due to my competitive spirit. Far too many times, I’d lose way too much for one session. That’s a very bad habit for a number of reasons.
First, even though poker should be looked at as one long game, it’s much easier to motivate yourself after a loss if you have a good chance to make it up in the next session. A huge defeat reduces that likelihood. Also, the further behind you get, the more your opponents win. This affects your odds: Players who are losing usually play worse, while those who are winning play better. Frequently, when good players take big losses, one reason is that their level of play deteriorated as they fell further behind.
… At one time or another, almost every top player is susceptible to losing more than he should during a session. This usually occurs when you’ve been playing a long time, taken too many bad beats and know you should quit. You’re tired, but your competitive nature keeps you at the table. And that can prove costly.
… There are a couple of lessons here: One, always make sure you’re trading with a clear head. If you’re tired or distracted, have the discipline to pull up and continue only when the odds are more favorable. Two, calculate your risk carefully and set loss limits, which enable you to maintain acceptable levels of exposure. That’s important all the time, but it’s especially crucial when you’re trading highly leveraged contracts such as forex or futures. Set reasonable risk levels, then stick to them — and you’ll always be able to stay in the game.
(I’m not a fan of Trader Monthly, but it’s free to subscribe so I give it a quick skim through each month.)
It was a relatively boring week this week. I experienced a modest loss of -0.6%. My score for following the road map is a also middle-of-the-road 6.5 out of 10, although I think I may be getting stronger at the margin: for the first time in a long time, I didn’t feel compelled to trade just because ‘I’m a trader, and traders trade’.