Wednesday, February 16, 2011

Ritholtz: books and lists

Barry Ritholz has a list of lists, as well as a list of books (link).

I haven't gone through all of the entries on the list. However, from one of his blog entries "The Zen of Trading," (link2) here are a couple of nuggets:
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6. Take Responsibility: Many folks believe “the game is fixed.” To them, I say: get over it. Stop whining and take the proper responsibility for your trades, your losses and yourself. ...
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That's one of the reasons I tend to spend so little time on conspiracy theories (precious metals market writers seem most prone to this). It is mostly a waste of time and energy to ponder for traders. Little fish won't ever know the whole truth. Best to do what you can or to avoid certain markets. Reading and writing about manipulation are mostly a waste of valuable time.

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7. Constantly Improve: Investing is so competitive that you cannot afford to stand still. Investors should constantly seek to raise their skill level by learning as much as possible about the markets, the economy, trading technologies and various schools of investing thought. But whatever you read, you must do so with a keenly skeptical eye, while retaining an open mind (‘taint easy to do).
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The markets are a moving target. Back-tested trading systems marketed to individuals tend to sell well. Unfortunately, the markets change, so what worked in the past may not keep working. These days, the big firms are constantly having their computers fine tune their algorithms, every day, every hour. The same holds for any number of other indicators.

All the markets still seem risky to me. Option premiums remain low, so the risk-reward for selling options doesn't look so good. Buying options for a directional move requires a high degree of confidence and conviction. I don't have that sense of clarity for any market. For now, I have a few small positions and am reluctant to put on more. Sitting is boring. Reading about sitting is even more boring. Better to be bored than to seek action and likely lose money to avoid the boredom.

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