CALDEIRÃO DE BOLSA

LTCM Escreveu:Este é, para mim, um dos melhores livros sobre “trading” e o melhor da série “wizards”, já o expressei várias vezes, só a entrevista ao William Eckhardt vale o preço do livro.
Portanto resolvi colocar os adágios, que se encontram na parte final do livro, no fórum, pois por fases e de forma concentrada neles se elencam os passos para o sucesso –ou não- nos mercados.

Porém fiquei algo admirado com a pouca aceitação que o tema suscitou nos forenses, será pelo texto ser em inglês?, por não ser suficientemente interessante? Seja o que for espero, pela positiva, que seja devido ao facto de a maioria já ter lido o livro

Àqueles que participaram no tópico o meu agradecimento, a todos os que o visitaram espero que tenham retirado algum ensinamento útil.

Bons negócios.

Pata-Hari Escreveu:O que me parece é que o system trading é muito mais relaxante, tira a pressão das decisões e o peso das más decisões. Basta treinar a disciplina e afinar a metodologia, sem que tenhamos a exigência de conhecimento das decisões discricionárias. É fácil tornar um sistema mecanico muito mais simpático...

I am frequently asked whether writing this volume and the first Market Wizards helped me become a better trader. The answer is yes, but not in the way people expect when they ask the question. No trader revealed to me any great market secrets or master plan unlocking the grand design of the markets. (If this is what you seek, don't despair, the answer is readily available-just check the ads in any financial periodical.) For me, the single most important lesson provided by the interviews is that it is absolutely necessary to adopt a trading approach precisely suited to one's own personality. Over the years, I have come to clearly realize mat what I really like about this business is trying to solve this master puzzle: How do you win in the markets? You have all these pieces, and you can put them together in a limitless number of ways, bounded only by your creativity. Moreover, to keep the game interesting, there are lots of pitfalls to lead you astray, and some of the rules keep changing in subtle ways. There is even a group of very intelligent people telling you that the game can't be won at all. The really fascinating thing is that, as complex as this puzzle is, there are a multitude of totally different solutions, and there are always better solutions. Trying to solve this wonderful puzzle is what I enjoy.

On the other hand, I have also come to realize that I do not like the trading aspect at all. I do not enjoy the emotionality of making intraday trading decisions. When I am losing, I am upset, and when I am on a hot streak, I am anxious because I know I can't keep it up. In short, it is not my style. In contrast, there are people who thrive on and excel at the actual trading. One person who in my mind epitomizes this type of approach is Paul Tudor Jones, whom I interviewed in Market Wizards. When you watch Paul trade, you can see he's really charged by the activity. He bubbles over with energy, taking in information from a hundred different directions and making instantaneo-us trading decisions. He seems to love it, as if it were some challenging sport. And loving it is probably why he is so good at it.

For many years, I participated in both descretionary trading and system trading. It is, perhaps, no coincidence that in the course of working on this book, I came to the conclusion that it "was system trading that suited my personality. Once I increased my efforts and commitment to system trading, my progress accelerated and I felt that the approach fit like a glove.

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It took me over a decade to figure out my natural direction. I'd suggest that you take the time to seriously ponder whether the path you are on is the one you want to be on. Perhaps your journey will then be shortened.

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42. KEEP TRADING IN PERSPECTIVE

There is more to life than trading.

41. PRICES ARE NONRANDOM = THE MARKETS CAN BE BEAT
In reference to academicians who believe market prices are random, Trout says, 'That's probably why they're professors and why I'm making money doing what I'm doing." The debate over whether prices are
random is not yet over. However, my experience with the interviews conducted for this book and its
predecessor leaves me with little doubt that the random walk theory is wrong.

It is not the magnitude of the winnings registered by the Market Wizards but the consistency of these winnings in some cases that underpin my belief. As a particularly compelling example, consider Blake's 25:1 ratio of winning to losing months and his average annual return of 45 percent compared with a worst drawdown of only 5 percent. It is hard to imagine that results this lopsided could occur purely by chance-perhaps in a universe filled with traders, but not in their more finite numbers. Certainly, winning at the markets is not easy-and, m fact, it is getting more difficult as professionals account for a constantly growing proportion of the activity- but it can be done!

As I see it, intuition is simply experience that resides in the subconscious mind. The objectivity of the market analysis done by the conscious mind can be compromised by all sorts of extraneous considerations (e.g., one's current market position, a resistance to change a previous forecast). The subconscious, however, is not inhibited by such constraints. Unfortunately, we can't readily tap into our subconscious thoughts.

40. THE ELEMENTS OF ACHIEVEMENT

Faulkner's list of the six key steps to achievement based on Gary Faris's study of successfully rehabilitated athletes appears to apply equally well to the goal of achieving trading success. These strategies include the following:
1. using both 'Toward" and "Away From" motivation;
2. having a goal of full capability plus, with anything less being unacceptable;
3. breaking down potentially overwhelming goals into chunks, with satisfaction garnered from the completion of each individual step;
4. keeping full concentration on the present moment-that is, the single task at hand rather than the longterm goal;
5. being personally involved in achieving goals (as opposed to depending on others); and
6. making self-to-self comparisons to measure progress.

39. LIFE'S MISSION AND LOVE OF THE ENDEAVOR
In talking to the traders interviewed in this book, I had the definite sense that many of them felt that trading was what they were meant to do-in essence, their mission in life. Recall Charles Faulkner's quote of John Grinder's description of mission: "What do you love so much that you would pay to do it?" Throughout my interviews, I was struck by the exuberance and love the Market Wizards had for trading. Many used gamelike analogies to describe trading. This type of love for the endeavor may indeed be an essential element for success.

38. PAY ATTENTION TO INTUITION
As I see it, intuition is simply experience that resides in the subconscious mind. The objectivity of the market analysis done by the conscious mind can be compromised by all sorts of extraneous considerations (e.g., one's current market position, a resistance to change a previous forecast). The subconscious, however, is not inhibited by such constraints. Unfortunately, we can't readily tap into our subconscious thoughts.

37. IDENTIFY AND ELIMINATE STRESS
Stress in trading is a sign that something is wrong. If you feel stress, think about the cause, and then act to eliminate the problem. For example, let's say you determine that the greatest source of stress is indecision in getting out of a losing position. One way to solve this problem is simply to enter a protective stop order every time you put on a position.
I will give you a personal example. One of the elements of my job is providing trading recommendations to brokers in my company. This task is very similar to trading, and, having done both, I believe it's actually more difficult than trading. At one point, after years of net profitable recommendations, I hit a bad streak. I just couldn't do anything right. When I was right about the direction of the market, my buy recommendation was just a bit too low (or my sell price too high). When I got in and the direction was right, I got stopped out-frequently within a few ticks of the extreme of the reaction. I responded by developing a range of computerized trading programs and technical indicators, thereby widely diversifying the trading advice I provided to the firm. I still made my day-to-day subjective calls on the market, but everything was no longer riding on the accuracy of these recommendations. By widely diversifying the trading-related advice and information, and transferring much of this load to mechanical approaches, I was able to greatly diminish a source of persona] siress-and improve the quality of the research product in the process.

36. THE CALM STATE OF A TRADER
If there is an emotional state associated with successful trading, it is the antithesis of excitement. Based on his observations, Faulkner stated that exceptional traders are able to remain calm and detached regardless of what the markets are doing. He describes Peter Steidlmayer's response to a position that is going against him as being typified by the thought, "Hmmm, look at that." Basso also talks directly about the benefits of a detached perspective in trading: "If instead of saying, 'I'm going to do this trade,' you say, 'I'm going to watch myself do this trade,' alt of a sudden you find that the process is a lot easier."

35. THE MARKETS ARE AN EXPENSIVE PLACE TOLOOKFOR EXCITEMENT
Excitement has a lot to do with the image of trading but nothing to do with success in trading (except in an inverse sense). In Market Wizards, Larry Hite described his conversation with a friend who couldn't understand his absolute adherence to a computerized trading system. His friend asked, "Larry, how can you trade the way you do. Isn't it boring?" Larry replied, "I don't trade for excitement; I trade to win." This passage came to mind when Faulkner described the trader who blew out because he found it too boring to be trading in the way that produced profits.

34. A MIND IS A TERRIBLE THING TO CLOSE
Open-mindedness seems to be a common trait among those who excel at trading. For example, Blake's entry into trading was actually an attempt to demonstrate to a friend that prices were random. When he realized he was wrong, he became a trader. Driehaus says that the mind is like a parachute; it's good only when it's open.

33. THINK TWICE WHEN THE MARKET LETS YOU OFF THE HOOK EASILY

Don't be too eager to get out of a position you have been worried at>out if the market allows you to exit at a much better price than anticipated. If you had been worried about an adverse overnight (or over-theweekend) price move because of a news event or a technical price failure on the previous close, it is likely that many other traders shared this concern.

The fact that the market does not follow through much on these fears strongly suggests that there must be some very powerful underlying forces in favor of the direction of the original position. This concept, which was first proposed by Marty Schwartz in Market Wizards, was illustrated in this volume by the manner in which Lipschutz exited the one trade he admitted had scared him.

In that instance, he held an enormous short dollar position in the midst of a strongly rallying market and had to wait for the Tokyo opening to find sufficient liquidity to exit his position. When the dollar opened weaker than expected in Tokyo, he didn't just dump his position m relief; rather, his trader's instincts told him to delay liquidation-a decision that resulted in a far better exit price.

31. DON'T DO THE COMFORTABLE THING
Eckhardt offers the rather provocative proposition that the human tendency to select comfortable choices will lead most people to experience worse than random results. In effect, he is saying that natural human traits lead to such poor trading decisions that most people would be better off flipping coins or throwing darts. Some of the examples Eckhardt cites of the comfortable choices people tend to make that run counter to sound trading principles include: gambling with losses, locking in sure winners, selling on strength and buying on weakness, and designing (or buying) trading systems that have been overfitted to past price behavior. The implied message to the trader is: Do what is right, not what feels comfortable.


32. YOU CAN'T WIN IF YOU HAVE TO WIN
There is an old Wall Street adage: "Scared money never wins." The reason is quite simple: If you are risking money you can't afford to lose, all the emotional pitfalls of trading will be magnified. Druckenmiller's "betting the ranch" on one trade, in a last-ditch effort to save his firm, is a perfect example of the above aphorism. Even though he came within one week of picking the absolute bottom in the T-bill market, he still lost all his money. The need to win fosters trading errors (e.g., excessive leverage and a lack of planning in the example just cited). The market seldom tolerates the carelessness associated with trades bom of desperation.

29. PULL OUT PARTIAL PROFITS
Pull a portion of winnings out of the market to prevent trading discipline from deteriorating into complacency. It is far too easy to rationalize overtrading and procrastination in liquidating losing trades by saying, "It's only profits." Profits withdrawn from an account are much more likely to be viewed as real money.

30. HOPE IS A FOUR-LETTER WORD
Hope is a dirty word for a trader, not only in regards to procrastinating in a losing position, hoping the market will come back, but also in terms of hoping for a reaction that will allow for a better entry in a missed trade. If such trades are good, the hoped-for reaction will not materialize until it is too late. Often the only way to enter such trades is to do so as soon as a reasonable stop-loss point can be identified.

28. LEARN TO BE DISLOYAL

Loyalty may be a virtue in family, friends, and pets, but it is a fatal flaw for a trader. Never have loyalty to a position. The novice trader will have lots of loyalty to his original position. He will ignore signs that he is on the wrong side of the market, riding his trade into a large loss while hoping for the best. The more experienced trader, having learned the importance of money management, will exit quickly once it is apparent he has made a bad trade. However, the truly skilled trader will be able to do a ISO-degree turn, reversing his position at a loss if market behavior points to such a course of action. Recall Dmckenmiller's illtimed reversal from short to long on the very day before the October 19, 1987 crash. His ability to quickly recognize his error and, more important, to unhesitatingly act on that realization by reversing back to short at a large loss helped transform a potentially disastrous month into a net profitable one.

26. CATCHING PART OF THE MOVE IS JUST FINE
Just because you missed the first major portion of a new trend, don't let that keep you from trading with that trend (as long as you can define a reasonable stop-loss point). Recall McKay's observation that the easiest part of a trend is the middle portion, which implies always missing part of the trend prior to entry.

27. MAXIMIZE GAINS, NOT THE NUMBER OF WINS
Eckhardt explains that human nature does not operate to maximize gain but rather the chance of a gain.
The problem with this is that it implies a lack of focus on the magnitudes of gains (and losses)-a flaw that leads to nonoptimal performance results. Eckhardt bluntly concludes: "The success rate of trades is the least important performance statistic and may even be inversely related to performance." Yass echoes a similar theme: "The basic concept that applies to both poker and option trading is that the primary object is not winning the most hands, but rather maximizing your gains."

25. SOMETIMES ACTION IS MORE IMPORTANT THAN PRUDENCE

Waiting for a price correction to enter the market may sound prudent, but it is often the wrong thing to do. When your analysis, methodology, or gut tells you to get into a trade at the market instead of waiting for a correction-do so. Caution against the influence of knowing that you could have gotten in at a better price in recent sessions, particularly in those situations when the market witnesses a sudden, large move (often due to an important surprise news item). If you don't feel the market is going to correct, that consideration is irrelevant.

These types of trades often work because they are so hard to do. As a perfect example, recall the willingness of the trader in Lipschutz's group to aggressively sell the dollar into a collapsing market following the G-7 meeting. Another example of this principle is Driehaus's willingness to buy a stock heavily after it is already up very sharply on a bullish earnings report if he feels the new information implies the stock will go still higher.