another good read
"Observe the masses and do the opposite."
Words of wisdom I picked up from a mentor I was fortunate to have many years ago.
He said most people are unthinking cattle, doing what everyone else was doing. He gave me that quote above with the warning that while it doesn't work all the time, it works enough of the time to always keep it in mind when you're around a crowd.
Here are a couple of recent examples that happened during my last visit to the beach. I had checked in to the resort and obtained the key to our 15th floor penthouse. (Okay, it was just below the penthouse. ) , and the parking permit for the resort's 7 story parking deck.
Because we arrived on a Sunday there were many people checking in and out, so the traffic was heavy and the parking was limited. Every person checking in, was driving round and round the bottom 3 or 4 levels of the parking deck waiting for a space to be vacated by a departing guest.
After my second time around it dawned on me to "observe the masses and do the opposite" I headed straight to the 7th level where there was plenty of parking; got my bags; took the empty elevator down to the ground floor and walked across to the hotel, leaving everyone else still circling like vultures in the parking deck.
But, my smugness at being so clever disappeared as soon as I stepped into the lobby and encounted a crowd of about 50 people, half of them rugrats (oops, I mean darling little children) all clad in beachwear, clutching armfuls of beach chairs, beach towels and assorted floats and sand toys. They were dripping water and dropping sand and they were ALL waiting on the elevator!
I stood their in despair, trying to figure out how many elevator loads it would take to convey this crowd, and how many stops it would take each load, and how long at each stop to drag their stuff off the elevator. <SIGH>
But then, (you guessed it) I "observed the masses and did the opposite".
I opened the door marked "Stairs" and went up to the second floor, where I caught the empty elevator coming down. I pushed the 15 button, but I did have to wait while the elevator went to the first floor for its next load.
The look on the peoples faces when the doors opened and they saw me was priceless!
Newbie traders are a crowd. What are the newbie masses doing?
* Scalping short term charts.
* Using too much leverage.
* Hopping from one holy grail system to the next.
* Learning 5000 indicators.
* Putting 20 indicators on a chart.
* Hearing about a system, and immediatly changing it or slapping a silly indicator on it after only five trades.
* Asking where to get "signals".
* Blindly following a mechanical system.
* Complaining about borkers.
* Neglecting Money Management
* Being a 90%er.
We were all newbies at one point. Let's give the new guys a hand whenever we can and teach them to
Observe the masses and do the opposite.
Dial
Words of wisdom I picked up from a mentor I was fortunate to have many years ago.
He said most people are unthinking cattle, doing what everyone else was doing. He gave me that quote above with the warning that while it doesn't work all the time, it works enough of the time to always keep it in mind when you're around a crowd.
Here are a couple of recent examples that happened during my last visit to the beach. I had checked in to the resort and obtained the key to our 15th floor penthouse. (Okay, it was just below the penthouse. ) , and the parking permit for the resort's 7 story parking deck.
Because we arrived on a Sunday there were many people checking in and out, so the traffic was heavy and the parking was limited. Every person checking in, was driving round and round the bottom 3 or 4 levels of the parking deck waiting for a space to be vacated by a departing guest.
After my second time around it dawned on me to "observe the masses and do the opposite" I headed straight to the 7th level where there was plenty of parking; got my bags; took the empty elevator down to the ground floor and walked across to the hotel, leaving everyone else still circling like vultures in the parking deck.
But, my smugness at being so clever disappeared as soon as I stepped into the lobby and encounted a crowd of about 50 people, half of them rugrats (oops, I mean darling little children) all clad in beachwear, clutching armfuls of beach chairs, beach towels and assorted floats and sand toys. They were dripping water and dropping sand and they were ALL waiting on the elevator!
I stood their in despair, trying to figure out how many elevator loads it would take to convey this crowd, and how many stops it would take each load, and how long at each stop to drag their stuff off the elevator. <SIGH>
But then, (you guessed it) I "observed the masses and did the opposite".
I opened the door marked "Stairs" and went up to the second floor, where I caught the empty elevator coming down. I pushed the 15 button, but I did have to wait while the elevator went to the first floor for its next load.
The look on the peoples faces when the doors opened and they saw me was priceless!
Newbie traders are a crowd. What are the newbie masses doing?
* Scalping short term charts.
* Using too much leverage.
* Hopping from one holy grail system to the next.
* Learning 5000 indicators.
* Putting 20 indicators on a chart.
* Hearing about a system, and immediatly changing it or slapping a silly indicator on it after only five trades.
* Asking where to get "signals".
* Blindly following a mechanical system.
* Complaining about borkers.
* Neglecting Money Management
* Being a 90%er.
We were all newbies at one point. Let's give the new guys a hand whenever we can and teach them to
Observe the masses and do the opposite.
Dial
