beware of investing advice from the media

The Market Is Dead And Beware Of Investing Advice From The Media

Posted on May 15, 2013 · Posted in Blog

This post was actually supposed to be added last week.  So, a brief update before I start.  The market is starting to show some good volume this week! But let’s continue to talk about the last few and investing

For those of you that have been actually been trading, you’ll completely agree with me that the month of April has was very interesting.  It sort of reminds me of holiday trading.  I could potentially have more fun watching paint dry.  That really depends on my company!

For the most part it’s been a snooze fest.  Take the last few weeks for instance.  I had the lowest amount of total trades ever for a week long period.  I took a total of 11 trades all week long.  This is not common.  There are days where I typically have 10 or more trades.  But this gem of a week had me taking only 11.

Talk about testing my patience!

So, I am looking at this period as an opportunity to improve both my patience and focus.  I can say that without a shadow of a doubt I’ve managed to improve both.

In fact it’s almost scary how good my focus has actually become.

This could also just be for the fact that I’m training to run my own trading room.  There is nothing more motivating to improve then knowing that you’ll have dozens and dozens of eyes glued to your screen.

So, overall my trading is still improving each and every day. I doubt I’ll ever be complacent with my ability to trade.  There is just soooo much to learn.

Speaking of learning, recently I came across this article that talked about top tips from a large group of market strategists.  It was written by Chuck Jaffe who has a daily radio show where he interviews these guys and gets their financial advice.  So, he wrote this article that talks about his seven bedrock financial lessons for investors.

What I found is that each of his lessons clearly apply to day trading as well. 

beware of investing advice from the mediaIn no particular order here are his seven lessons.

1. There is no one right way to invest.

2. Investing is not a competition.

3. You’re not “playing the market” when it’s your money.

4. Real life doesn’t always fit nicely into formulas.

5. You won’t find out whether “easy” equals “good” until it’s too late.

6. You can’t avoid being wrong; you can only hope you are right enough to make up for the mistakes.

7. Don’t “buy, buy, buy” without knowing “why, why, why.”

Source Market Watch

While I agree with him on most points, I have to say that I strongly disagree with him on points 3 and 4.  For starters number three just depends.  If you have serious control issues then it’s definitely a good rule to live by.

But if you’re one scared ass mofo then you definitely need to take the game approach.

Hardcore gamers are typically what made the best poker players and for good reason.  They weren’t afraid of losing money.  They treated poker like it was a video game being played with fake money.  Those were the guys that excelled at poker.  So, when I get someone who comes to me and is really terrified to pull the trigger, this is one of the areas we work on.

As for number four again it’s a double edged sword.  While I agree that real life and trading doesn’t fit nicely into formulas, for the most part they sure help.

I like to compare this to being a paramedic.  While you’ve seen a good deal of similar situations, sometimes that one really freaky situation comes along and you have to improvise to the best of your abilities.  But for the most part every similar situation has a protocol.  You’re dealing with someone’s life after all.  You have to have a specific set of rules you follow in this situations.

For some of you more advanced traders, you’ll know what I described in the paragraph above is very similar to our trading plans. 

We have a specific set of rules that we follow in every situation.

It’s important to have these rules actually written because when our emotions get fired up there’s no telling how thick that cloud will be that blocks our rational thought process.  We might as well be prepared with the exact steps we should take.

So, there you have it some pretty good advice from a stock market columnist and my take on how they apply to day trading.

I hope this has helped some of you all and I will continue to scour the internet for some of these interesting and helpful articles.

Talk Later Gators!

About the author

Liz Herrera Liz Herrera is a day trader and former professional poker player. Between 2003-2011 she was one of the top female earners at the highest and most difficult stakes online. As a result, she was featured in Jared Tendler’s book, The Mental Game of Poker. Since then she has retired from online poker and now spends her time educating new day traders on the importance of a solid mindset.