Sunday, 31 January 2016

The Dark Side of Social Media

The Dark Side of Social Media #Infographic

Quote for the day

“What is imperfect can be improved. Accepting the uncertainties connected with our fallibility opens up the vista for infinite improvement.” - George Soros

Saturday, 30 January 2016

10 Mistakes Smart People Never Make Twice

Smart people embrace mistakes for what they are -- great opportunities to learn.

By Travis Bradberry

Everybody makes mistakes -- that's a given -- but not everyone learns from them. Some people make the same mistakes over and over again, fail to make any real progress, and can't figure out why.

"Mistakes are always forgiveable, if one has the courage to admit them." -Bruce Lee

When we make mistakes, it can be hard to admit to because doing so feels like an attack on our self-worth. This tendency poses a huge problem because new research proves something that common sense has told us for a very long time -- fully acknowledging and embracing errors is the only way to avoid repeating them.

Yet, many of us still struggle with this.

Researchers from the Clinical Psychophysiology Lab at Michigan State University found that people fall into one of two camps when it comes to mistakes: those who have a fixed mind-set ("Forget this; I'll never be good at it") and those who have a growth mind-set ("What a wake-up call! Let's see what I did wrong so I won't do it again").

"By paying attention to mistakes, we invest more time and effort to correct them," says study author Jason Moser. "The result is that you make the mistake work for you."



"When you repeat a mistake, it is not a mistake any more: it is a decision." 
-Paulo Coelho


1. Believing in someone or something that's too good to be true.




3. Failing to delay gratification.

We live in a world where books instantly appear on our e-readers, news travels far and wide, and just about anything can show up at our doorsteps in as little as a day. Smart people know that true gratification doesn't come quickly and that real rewards are built on hard work. They also know how to use this as motivation to get them through every step of the arduous process that leads to success because they've felt the pain and disappointment that come with selling themselves short.

4. Operating without a budget.

You can't experience financial freedom until you operate under the constraint of a budget. Sticking to a budget, personally and professionally, forces us to make thoughtful choices about what we want and need. Smart people have to face that insurmountable pile of bills only once before getting their act together, starting with a thorough reckoning as to where their money is going. They realize that once you understand how much you're spending and what you're spending it on, the right choices become clear. A morning latte is a lot less tempting when you're aware of the cost: $1,000 on average per year. Having a budget isn't only about making sure that you have enough to pay the bills; smart people know that making and sticking to a strict budget means never having to pass up an opportunity because they've blown their precious capital on discretionary expenditures. Budgets establish discipline, and discipline is the foundation of quality work.

5. Losing sight of the big picture.

It's so easy to become head-down busy, working so hard on what's right in front of you that you lose sight of the big picture. But smart people learn how to keep this in check by weighing their daily priorities against a carefully calculated goal. It's not that they don't care about small-scale work, they just have the discipline and perspective to adjust their course as necessary. Life is all about the big picture, and when you lose sight of it, everything suffers.

6. Not doing your homework.

Everybody's taken a short cut at some point, whether it was copying a friend's biology assignment or strolling into an important meeting unprepared. Smart people realize that while they may occasionally get lucky, that approach will hold them back from achieving their full potential. They don't take chances, and they understand there's no substitute for hard work and due diligence. If you don't do your homework, you'll never learn anything -- and that's a sure fire way to bring your career to a screeching halt.

7. Trying to be someone or something you're not.

It's tempting to try to be whom you think people want you be, but no one likes a fake, and trying to be someone you're not never ends well. Smart people figure that out the first time they get called out for being a phony, forget their lines, or drop out of character. Other people never seem to realize that everyone else can see right through their act. They don't recognize the relationships they've damaged, the jobs they've lost, and the opportunities they've missed as a result of trying to be someone they're not. Smart people, on the other hand, make that connection right away and realize that happiness and success demand authenticity.

8. Trying to please everyone.

Almost everyone makes this mistake at some point, but smart people realize it's simply impossible to please everybody, and trying to please everyone pleases no one. Smart people know that in order to be effective, you have to develop the courage to call the shots and make the choices you feel are right (not the ones everyone will like).

9. Playing the victim.

News reports and our social media feeds are filled with stories of people who seem to get ahead by playing the victim. Smart people may try it once, but they realize quickly that it's a form of manipulation and that any benefits will come to a screeching halt as soon as people see it's a game. But there's a more subtle aspect of this strategy that only truly smart people grasp: to play the victim, you have to give up your power, and you can't put a price on that.

10. Trying to change someone.

The only way that people change is through the desire and wherewithal to change themselves. Still, it's tempting to try to change someone who doesn't want to change, as if your sheer will and desire for them to improve will change them (as it has you). Some even actively choose people with problems, thinking they can "fix" them. Smart people may make that mistake once, but soon they realize they'll never be able to change anyone but themselves. Instead, they build their lives around genuine, positive people and work to avoid problematic people that bring them down.

Bringing it all together.

Emotionally intelligent people are successful because they never stop learning. They learn from their mistakes, they learn from their successes, and they're always changing themselves for the better.

Quote for the day


Friday, 29 January 2016

CSE - Percentage wise Top 18 Gainers and 25 Losers in January 2016

Top 18 Gainers in January 2016

Top 25 Losers in January 2016

Colombo Stock Exchange Trade Summary 29-Jan-2016

Colombo Stock Exchange ASPIs' worst January since 2003 casts dark clouds over 2016?

2016 January seems to be the second worst January for ASPI from the inception of CSE.

Since 1985 Colombo Stock Exchange ASPI has started the year with negative return thirteen times for the month of January. 
And only six times has the ASPI finished one of those years in the green.

Interestingly from the inception of Colombo Stock Exchange (1985), the ASPI has started the year with positive return eighteen times for the month of January. And only four times has the ASPI finished one of those years in the red.

Quote for the day


Thursday, 28 January 2016

Wednesday, 27 January 2016

Colombo Stock Exchange Trade Summary 27-Jan-2016

Quote for the day


Monday, 25 January 2016

Colombo Stock Exchange Trade Summary 25-Jan-2016

Quote for the day

"Acquisition of skills requires a regular environment, an adequate opportunity to practice, and rapid and unequivocal feedback about the correctness of thoughts and actions." - Daniel Kahneman

Sunday, 24 January 2016

Some Corrections Turn into Bear Markets

By Ivanhoff

“A bull market is when you check your stocks every day to see how much money you’ve made. A bear market is when you don’t bother to look anymore.” – Bruce Kamich

In her excellent book “Bull”, journalist Maggie Mahar interviews Richard Russell on the three psychological stages of a bear market:

“The earliest stage is characterized by denial, increased anxiety, and fear. The second stage is panic. People suddenly say, ‘I’ve got to sell.’ The third phase is despair.” In the third phase, investors are so tired of the stock market that they don’t want to hear about stocks any more, at any price”

Most corrections will remain just that – corrections. They won’t turn into bear markets. They will last a few weeks or few months. In the end, indexes will recover to new highs.

And yet, some corrections turn into bear markets. They are rare, but over 30-40 years of investing or trading, you will probably experience at least two or three of them – if market patterns continue to repeat. As long as there are humans involved, you can count on it. Markets always overshoot to the upside and the downside, because people’s psychology is cyclical and people tend to underreact to new information, then panic and overreact. Overreactions create the foundations for mean-reversions. Booms eventually lead to busts and busts to booms.

My definition of a bear market – spending a long time (more than a year) under a declining 200-day moving average, leading to 50% or bigger decline in a major, wide-encompassing index, like the S & P 500 for example.

You can imagine if an index is down 50%, what can happen to many individual stocks. No stock is insured against a bear market. Apple and Google lost 60% during the bear market in 2008. Amazon lost 95% during the bear market of 2000-2002. Priceline lost 99% in the same period. All of them managed to recover and hit new all-time highs afterward, but do you really think that you could have stomached the drawdowns that you had to go through? Do you really think that you could have put $1 million into PCLN and watch it turn into 10,000 and ride it all the way back without spooking at some stage and selling everything? Think again.

Are you familiar with the 50/30/20 concept? It states that 50% of a stock’s move is defined by the general market direction; 30% – by its industry; and only 20% is impacted by the individual merits of the underlying company. In a bear market, the 50/30/20 rule of thumb become something like the 90/10 rule, where 90% of a stock’s move is defined by the general direction of the market and only 10% – by the individual characteristics of that stock.

Traders should trade. Investors should invest. Whether you are a trader or an investor, if you deal with individual stocks, you always have to have an exit strategy. Some stocks never come back from their big drawdowns during market corrections.

This is a small excerpt from my book CRASH: How to Protect and Grow Capital during Corrections

Quote for the day


Saturday, 23 January 2016

10 Hard Things You Need To Do For Success (While Many People Are Unaware)

By Aleksander Ilic

The road to success is a long and winding one, with plenty of obstacles just waiting to trip up a careless traveller. Apart from the privileged few who are given everything on a silver platter, most of the people who make their dreams come true put in a lot of hard work and make sacrifices behind the scenes, constantly improving themselves. Shaping yourself into a smarter, faster, stronger and better version takes time, and there are a number of things that you need to do for success, even though you may not realize it yet.

1. Stay calm and composed during conflict situations

One of the first things to look for in a good leader is the ability to keep his or her composure during a high pressure situation. We can look at lions for a good example of effective leadership – the male lion is the leader of the group, even though the females do most of the hunting while he just lies around, but as soon as a large animal threatens the group the lion remains calm and deals with the threat, even if it means sacrificing his life to keep everyone safe.

Now, you shouldn't just sit there and wait for an opportunity to show off your conflict management skills, but you have learn to stay calm during arguments and crisis situations.

2. Practice good manners and always be polite

You never know when a great opportunity will present itself – you might be at a party, at a parking lot or buying groceries when you meet someone who may have a job opportunity or an interesting business proposition for you. Practising good manners will significantly improve the way other people perceive you, and by constantly reinforcing a polite and composed demeanour in your daily life, you will actually prepare yourself for professional and courteous behaviour during business meetings and negotiations.

It’s easy to allow yourself to explode at every little thing that irks you or resort to sarcasm and rudeness, but the true greats will never let their frustration or insecurities show. If everyone sees you as a reasonable, trustworthy and polite individual, many doors will open for you.

3. Be incredibly punctual and consistently productive

The main thing that separates successful people from the rest of the crowd is their ability to organize their life down to the last second and always be on time, clocking in a number of highly productive hours each day. Unfortunately, consistency is not something many people are good at.

This is why companies go to great lengths to ensure that their employees stay punctual, but if you want to build a successful career, you’ll have to find a way to develop these positive habits on your own. Even if the company has a strict attendance policy and the right software in place, you still need to go to bed on time, wake up early and stay focused throughout the day. Learning to motivate yourself to get things done when you really don’t feel like it and have a number of obstacles in your way is the most important career lesson you can learn.

4. Acknowledge your mistakes

Refusing to accept that you’ve made a mistake is not only counter-productive, but quite childish. A grown man or woman should have a firm grasp of reality and be aware of their own imperfections. Even though we can never be completely objective, we can at least admit that we have made a mistake and try not make similar mistakes next time. Accepting that you are flawed and trying to improve things about yourself that have become major character traits over time is incredibly difficult, which is why most people keep shifting blame and never grow.

5. Work hard on improving yourself in all aspects of life

While focusing on a single aspect of your life and even a single skill can help you master it faster before moving on to the next issue that needs improvement, being good at a couple of things is not going to be enough to attain true success. Communication and negotiation skills are important in practically any line of work, while dressing with style and confident body language can help you take your career to the next level regardless of skill and experience.

Taking care of your body and getting all the nutrients you need, as well as exercising, is going to boost focus, give you more energy and make you feel very confident. As you can see, reading, exercising, dieting, people skills and many other good habits all come together to create a winning mentality, and successful people strive to improve in different ways.

6. Push through failure with supreme confidence

A lot of people mistakenly assume that those rare few who achieve excellence simply have a unique combination of incredible talent and luck, which helps them get to the top without ever making any mistakes. However, while talent plays a big role, it’s actually the courage to try new things, tons of hard work and supreme confidence in yourself that are going to catapult you out of mediocrity. You have to believe that what you are doing is the best possible option if you want to be able to shrug off failures and keep moving forward.

A smart man once said: “We either win or we learn” – there is no “fail” in the vocabulary of a winner, all those minor setbacks are just lessons in the school of hard knocks. This confidence doesn’t come easy – it must be nurtured daily, by positive phrases repeated in front of the mirror and by truly believing that all the goals you have set can and will be accomplished sooner or later.

7. Come up with your own answers through tons of research and practice

Information is often served to us on a silver platter, but practical experience has shown that the easier it is to attain information, the more you should question its validity. There are tons of myths and misinformation out there, and a quick 3 minute Google search is not going to help you master any topic. You can never just take someone's word for it, it's important to read, read, and read some more.

Read from several different sources, find experts who most people in the field respect, and always try and see if the theory works in practice – your unique set of circumstances may require a slightly modified approach, and some tips might not apply to you.

8. Force yourself to take on as much work as you can handle, and then some

Making it big is not something you can do from your couch. Well, I guess you can if you spend countless hours working on your laptop on a cozy couch, but it’s still work. Entrepreneurs have it worst, but even if you work for a company, climbing the corporate ladder is no easy task.

You have to bring in lots of money or improve the efficiency at the office,become a brand ambassador on social media, work on impressing the bosses, navigate the murky waters of office politics, convince the higher-ups that promoting you will benefit them personally in some way, and find any way you can to stand out. This takes a lot of work, and a good chunk of it is not directly related to your field of expertise, so most people either crumble under the pressure or just give up and stay in the same place for years.

9. Cover all the minute details when making a plan

A regular Joe will ask a few questions about a project and create a plan of action in a few broad strokes, but a smart businessman will want to cover all the bases. Jumping head first into the deep end isn’t going to yield the greatest of results, and even if you manage to handle a situation, chances are there was a better way of doing things that you’ve missed because you failed to prepare.

10. Invest your time, effort and money into a great opportunity, even if there is no guarantee it will pay off

This is the ultimate test of willpower and passion – the willingness to go with your gut feeling and jump on opportunities, even if there is no guarantee that you will succeed. There will be plenty of high-risk, high-reward opportunities along the way, and you need to learn how to distinguish diamonds in the rough from plain old rubble, so to speak. In the beginning you'll be playing the numbers game, and for every 2-4 misses you'll hit one big project, but as you become wiser and more successful you'll be able to make calculated risks. Believing in yourself and taking chances is what will help you advance in your career.

We admire powerful and successful people, but we often fail to realize just how much work goes into making it big. All of the things in this article need to come together to pave the road to success, and it's hard to manage it all, but no one said that it was going to be easy.

Worst Day Ever? - All Traders must read this poem

By Chanie Gorkin

Today was the absolute worst day ever
And don't try to convince me that
There's something good in every day
Because, when you take a closer look,
This world is a pretty evil place.
Even if
Some goodness does shine through once in a while
Satisfaction and happiness don't last.
And it's not true that
It's all in the mind and heart
True happiness can be attained
Only if one's surroundings are good
It's not true that good exists
I'm sure you can agree that
The reality
My attitude
It's all beyond my control
And you'll never in a million years hear me say 
Today was a very good day

Now read it from bottom to top, the other way,
And see what I really feel about my day.

Quote for the day

"We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events." - Daniel Kahneman

Thursday, 21 January 2016

Colombo Stock Exchange Trade Summary 21-Jan-2016

Quote for the day


Wednesday, 20 January 2016

Colombo Stock Exchange Trade Summary 20-Jan-2016

Why You shouldn't sell during a Stock Market Correction?


Why You Shouldn

Quote for the day


Tuesday, 19 January 2016

Colombo Stock Exchange Trade Summary 19-Jan-2016

Quote for the day

“The point of forecasting is not to attempt illusory certainty, but to identify the full range of possible outcomes.” - Paul Saffo

Monday, 18 January 2016

Colombo Stock Exchange Trade Summary 18-Jan-2016

Quote for the day


Sunday, 17 January 2016

Financial Matters

By Ben Carlson, CFA

“If I were an executive coach, I would try to focus each individual on the facets they can control. Emphasizing what’s in your control allows you to adopt an attitude of equanimity toward luck. You've done all that you can, and from there you have to live with the results—good or bad.” – Michael Mauboussin

Wading through the overwhelming noise can be a chore when dealing with your finances and investments. Here’s my list to help you decide what really matters and what you can do without when making financial decisions.

Doesn't Matter: Your theories on tax policy.
Does Matter: Taking advantage of tax sheltered retirement accounts.

Doesn't Matter: Developing tactics for every short-term market move or geopolitical risk.

Doesn't Matter: Your political views.
Does Matter: Creating a comprehensive financial plan.

Doesn't Matter: How cheap your trading commissions are.
Does Matter: Keeping your overall investment costs in check.

Doesn't Matter: The inevitable market correction.
Does Matter: How you react when stocks fall.

Doesn't Matter: What happened in the market yesterday.
Does Matter: An understanding of your time horizon.

Doesn't Matter: Trying to time the market.
Does Matter: Your behaviour so you don’t buy high and sell low.

Doesn't Matter: The value of the U.S. Dollar.
Does Matter: Improving your career prospects to earn more of those dollars.

Doesn't Matter: Your thoughts on where interest rates are heading this year.
Does Matter: Your tolerance for risk in your portfolio.

Doesn't Matter: Trying to explain why the market rose or fell on any given day.
Does Matter: Ignoring the endless noise about daily market moves.

Doesn't Matter: How rigged you think the CPI inflation calculation is.
Does Matter: Your personal spending inflation.

Doesn't Matter: The next release of the minutes from the latest Fed meeting.
Does Matter: How much money you save.

Doesn't Matter: Having the highest IQ in the room.
Does Matter: Developing your emotional intelligence.

Doesn't Matter: Arguing with people on Twitter about their stock picks.
Does Matter: Keeping the negativity in your life to a minimum.

Doesn't Matter: What your brother-in-law says he made on a penny stock.
Does Matter: The fact that 8 out of 10 small businesses fail within the first year.

Doesn't Matter: How many jet skis and snow mobiles your neighbour owns.
Does Matter: Your net worth.

Doesn't Matter: The next 3-5% move in the stock market.
Does Matter: Increasing the amount you save each year by 3-5%.

Doesn't Matter: The daily value of your portfolio.
Does Matter: The value of your portfolio when you retire.

Doesn't Matter: Making occasional mistakes with your finances.
Does Matter: Continuing to make the same mistakes over and over again.

Doesn't Matter: Spending money on things that make you happy (meaning it’s OK to do this).
Does Matter: Cutting back everywhere else.

Doesn't Matter: Losing money in your portfolio occasionally.
Does Matter: Running out of money before you need it by not taking any risk.

Doesn't Matter: Buying stocks at the absolute top or bottom of the market.
Does Matter: Dollar cost averaging over multiple decades.

Doesn't Matter: Consistently beating “the market.”
Does Matter: Slowly building wealth over time to achieve your goals.

Doesn't Matter: How high frequency trading affects the market.
Does Matter: How little you trade in your accounts.

Doesn't Matter: That one stock you sold too soon or didn't buy early enough.
Does Matter: The opportunity cost of not saving early.

Doesn't Matter: The number of stock tickers on your watch-list.
Does Matter: The number of books you read.

Doesn't Matter: The latest pundit predictions.
Does Matter: Understanding financial market history.

Doesn't Matter: The specific investment strategy you choose to implement.
Does Matter: Your ability to stick with that strategy over various cycles.

Doesn't Matter: The upcoming GDP or unemployment number.
Does Matter: How little you worry about a single piece of economic data.

Doesn't Matter: Your stock picking skills.
Does Matter: Your asset allocation.

Doesn't Matter: Having a positive outcome every single time you invest.
Does Matter: Having a rules-based process.

Doesn't Matter: Predicting the next Black Swan.
Does Matter: Your ability to focus on what’s within your control.

Doesn't Matter: Specific, context dependent advice.
Does Matter: Long-term thinking.

Doesn't Matter: The interest rate you earn on your savings account.
Does Matter: Allowing compound interest to do the heavy lifting for you.

Doesn't Matter: How much risk everyone else takes.
Does Matter: How much risk you are willing and able to take.

Doesn't Matter: Doing something all of the time.
Does Matter: Doing nothing most of the time.

Quote for the day

"We use a lot of grapevine ideas, asking people what they've finished buying that might be interesting. Why not look at what other great investors have found?" -  Bruce Berkowitz

Saturday, 16 January 2016

20 Terrible Ways to Trade



Here are the top 20:





















Quote for the day


Friday, 15 January 2016

The Seven Beliefs Of Success


Belief #1: Everything happens for a reason


Belief #2: Failure does not exist

Belief #3: Take responsibility no matter what


Belief #4: You don’t need to understand everything perfectly

Belief #5: Your biggest resource are your people


Belief #6: Work is play


Belief #7: There is no success without commitment



Quote for the day


Things People Say During a Market Correction

By Ben Carlson, CFA






Stay the course.

Think long-term.


Avoid emerging markets until the dust settles.

We're using this correction as a buying opportunity.

We've decided to lower our year-end market target.

Um, what's going on here?

Where is the Fed when you need them?

I knew I should have sold last week.

Here's what you need to do RIGHT NOW with your portfolio.


Something's gotta give here…

Like I was saying a few weeks ago…

Don't say I didn't warn you…

Is it time to panic?


We're seeing a lot of buying opportunities down here.

The carnage is not even close to being over.

I'll buy when…

It could be worse, at least I don't own…

I'll sell when I'm back to even…

There's still a ton of cash on the sidelines.

Don't try to catch a falling knife.

Buy when there's blood in the streets.

Cut your losses quickly.








Wednesday, 13 January 2016

Tuesday, 12 January 2016

Colombo Stock Exchange Trade Summary 12-Jan-2016

2016 is CSE - ASPI's fifth worst six-day starts to a year ever

Quote for the day

“Long wave forces are very powerful and operate slowly over time, making them hard to recognize by most people. The long wave is like the tide in the ocean, powerful and operating below the surface.” - Tony Boekh

Monday, 11 January 2016

Colombo Stock Exchange Trade Summary 11-Jan-2016

Quote for the day

"Everything that irritates us about others can lead us to a better understanding of ourselves." - Carl Jung

Sunday, 10 January 2016

8 Things Traders can learn from Professional Boxing

Analogies and metaphors can be a great learning tool because they make complex and not so obvious concepts easily accessible. Whereas trading and boxing don't seem to have much in common at first glance – two guys beating each other up vs. making sophisticated decisions in the financial markets – the underlying principles show a lot of similarities.

1. You can't avoid getting hit

Even though the best boxers have great reflexes and are very quick on their feet, they will still be hit many times during a fight. It's impossible to not get hit at all during a fight. Getting hit does not mean that you are going to lose; it's part of the game.

In trading, you can't avoid losses and they will occur frequently; it's not even necessary to avoid losses and trying to prove you are wrong often ends in a disaster. The professional takes his losses unaffected by them and just keeps going; he does not lose his focus and waits for the next high probability trade pattern to land his punch.

2. Take many hits without taking that ONE hit that will knock you out

As we have said, getting hit is normal. But, at the same time, you have to avoid taking that one huge hit that will knock you out. You have to play great defence, be quick on your feet and never let your guard down. Just one moment of carelessness and one serious hit can mean the end.

In trading, you have to control your risk at all times and define your worst case scenario. Use adequate position sizing, protect your trade with a stop and make sure that never, ever a single trade can result in a major loss.

3. You don't have to go for the Knock-out. A win on points is also a win

Although a knock-out looks great, it is no different from a regular win by points. The best boxers don't use uncontrolled swings or suddenly start attacking recklessly. They know that by making precise and effective punches, they will be able to win as well, without running the risk of running into a counter attack.

In trading, you don't have to go for the big winners either. Regular and well executed winners will add up over time. The professional trader stays in control at all times and he knows that his edge guarantees trading success over the long term.

4. Control your emotions. Don't let your opponent in your head

Before two opponents step into the ring, the mental fight has already started. Professional boxers know that if they can get into their opponent’s head, they can tip the scale in their favour. Tilting your opponent has the goal to make him do imprudent things, deviate from his plan and act emotionally.

As traders, we don't have a real opponent we can face. The opponent of a trader sits between his own ears and controlling your own temper and emotional state is the key factor to trading success. Often, just one loss can lead to an emotional downward spiral where traders lose much more than necessary.

5. The preparation for every fight is different

The preparation for every new fight is different because the opponent changes. A boxer has to first analyse his opponent; find his strengths, weaknesses and the unique characteristics and then come up with a game plan. He can't just use the same preparation and fight plan for every fight.

Traders often make the mistake of applying one method to different markets, time frames and market conditions. Volatility and momentum change all the time; different markets move differently from each other and the way price manifests on lower time frames is very different from higher time frame price action. Thus, a trader needs to adapt with his trading method each time he wants to enter a trade and evaluate market conditions.
"In boxing you create a strategy to beat each new opponent, it’s just like chess." – Lennox Lewis

6. You have to react to what happens at that moment

Even though boxers prepare a game plan where they lay out how they will approach the fight and how to set the pace, they are always ready to change it on the fly. When their opponent behaves differently than expected, when they unexpectedly take an early hit or if they see a weakness, they are ready to change their game plan instantly.

Traders are usually too static and only operate in reactionary mode. Although you need a trading plan and follow your rules, if something unexpected happens, you have to adjust immediately. Amateurs often freeze in times of adversity and then get knocked out by a punch they saw coming for a long time.

7. You have to work yourself up from the bottom

Tyson, Ali or Holyfield didn't just decide that they were going to fight for the world championship title. They started years and decades ago, worked hard without knowing how their future career would look like; they fought in dozens and hundreds of small fights in run-down gyms and slowly worked their way up until one day they could make the step onto the big stage.

Traders have to follow a similar path. You can't just decide to be a winning trader. You will most likely go through several accounts, lose money for months and sometimes even years; you have to work 7 days a week, 12 hours a day, not knowing if all the effort will pay off, but never forgetting about your goal.


8. Master the basics

The best boxers are the ones who have perfected the boxing basics; they have a perfect footwork, jab effectively, have a save guard, a dangerous hook, and great endurance. The best boxers don't necessarily have the most extravagant techniques or developed special tricks; they are just masters at what really matters.

Only if a trader can master the basics, he has a chance of succeeding. Being able to perform a multiple time-frame analysis, understanding how to read price strength and sentiment, understanding the basic principles of statistics and variance, having a stable position sizing and risk management approach and religiously following his own trading rules is the foundation of any great trader; trading is not about new and better indicators and finding a trick to call better entries.

"The tempt for greatness is the biggest drug in the world." – Mike Tyson