I’ve traded stocks for forty years from various countries around the world. The stock exchange in Addis Ababa was a chalk board in a local bank, open a couple hours on weekdays. Spokane was dedicated to penny mining stocks. I traded currencies sitting atop burlap sacks of wheat in Kabul’s old granary. Now we’ve got super-fast online algos and battalions of talking heads promoting their own interests. But no matter. Some things I’ve learned cut through the hype. I hope they help you if trades are going wrong.
1. A trade is neither right nor wrong. A trade can only be profitable or not profitable.
- a) Profitable is good.
b) Unprofitable is bad. Do something!
2. Therapy for traders on a losing streak:
- a) Brag about your losers, not your winners. Tell everybody about losses. Get on the phone! Tweet!
b) For a losing trade the only thing to brag about is how small you kept the loss, how quickly you stopped the bleeding.
c) Your Ego must understand that you’re going to tell everybody about every loss.
d) Bragging about losers will develop an inner voice urging you to get out. It will replace the voice keeping you in losing trades.
3. The market is uncaring. If you hang on to losing trades, telling
yourself “I’m right, I know I’m right”, the market will grind your
trading stake down to zero.
4. Every trade has two aspects, time and market direction.
- a) for every trade, know your time frame.
b) for every time frame, determine market direction.
c) enter the trade near the beginning of the time frame with
the market going in the direction of your trade.
d) you can now monitor your trade in terms of time and
e) at the end of the time frame, recalculate. Are your assumptions still correct? What’s your new time frame? Why are you still in the trade?
f) if the market direction changes, why are you still in the
trade? Why didn’t you set a stop? Are you looking
for a loss to brag about? Return to #2.
5. As an individual trader, you’re competing against guys with PhD.s in
math and physics, against giant super-computers, against ruthless pit
traders who have the advantage of being on the floor.
- a) The PhD.s are smarter than you.
b) The pit traders are genetically superior – short
attention spans quickly alert to new stimuli, the
master hunters of pre-historic times.
c) Your computer is no match for the competing computers.
d) Always know where the escape hatch is for each and
every trade. How fast can you get through it? Practice!
6. If you start believing that you have some special insight into the
market, that you’ve “cracked the code”, discovered “the natural order of
the market”, that the market will go where you say, then put your money in T-Bills and take a long vacation. Motorcyclists who stay afraid of their machines die of old age. Those who think they’re Evel Knieval die terrible deaths. Know your machine before you drive it, and stay alert. Freight trains do come roaring across unmarked crossings.
7. The market is a mechanism for transferring wealth. It does so by
causing pain. Great wealth transfers in times of great pain. Losses are
a way of causing pain. Card sharks operate by letting the sucker win big
in the early going. But by the end of the game, the card sharks have all
the sucker’s money, his clothes, his house, and the sucker’s gratitude
for letting him get away from the table with his life. If you’re making
bigger and bigger trades, think about the sucker who ended up betting it
all exactly at the time the sharks held all the winning cards. Trading
is a business. You go to work in the morning, go home at night, and earn
a paycheck at the end of the week. Keep the size of your trades
reasonable. The sharks can’t take what’s not on the table.
8. Once in a while a sure thing comes along. It’s a good day to skip
trading and take a walk on the beach.
9. As options expiration approaches, the Grand Croupier will sweep the table in all directions. You’re not the croupier. In the last week, never keep an expiring short position that’s within reach of the croupier’s stick. Time and an approaching expiration let the croupier take control of an open short. It’s asking for great pain.
10. Getting market direction right is only the first step of a trade.
Selecting the best trade (trading strategy) is the next step. For
example, is it better to go long a put (it will decay against you)?… or
to enter a call spread for a credit (it will decay for you)? The answer
depends on market conditions. Money management is the 3rd step. Your
goal is to make a profit, not show the world. Your profit/loss statement
will accurately reflect your trading at the end of every day. Read it
carefully. Understand its message.
These are a few thoughts that I’ve found helpful. I hope they help you, too. Please feel free to share them. Wishing you peace, prosperity and good trading – Karl.
After the market closes, I hope you’ll relax with a copy of my novel, “A Lesion of Dissent”. It’s available on both Amazon.com and Smashwords.com at the links below.
Same great novel, your choice of either original art cover
I stood by a painted post on a gravel highway. Chill autumn wind was blowing through sparse sagebrush on the darkening Baluchi plains and I did not know what to do. Westward, the milk-train bus I’d ridden all day was retreating back into Iran. East of the post lay Afghanistan, its nearest city, Herat, miles away through the fast-falling night. Several other backpackers from various Western nations also stood near that post, the final passengers to exit the bus that we’d boarded early that morning in Meshad. No one but adventurers headed overland to Afghanistan in 1968.
The border was the post, the post was the border, our transport was gone. We faced away from the disappearing bus, marooned, staring in the direction we thought must lead to Herat. Very gradually, some dim lights appeared, and slowly grew bolder, though hardly brighter. We watched until a World War II surplus army jeep pulled up, an Afghan at the wheel.
We quickly established that we had no common language. “Herat,” we said and pointed. “Herat,” he said and pointed. We fumbled our way to a price for transport, handed over some money, and piled into the jeep, crowded together, backpacks on our knees. And then out of the dark, another Afghan appeared, clutching a long Browning rifle, the weapon the Allies issued their infantry in WW II.
The driver motioned for us to make room, and Rifleman crowded in, a big man right next to me in the front seat, squeezing me over against the driver, and we began a slow crawl along the rutted highway into the eastern night, the limpid six-volt headlights swallowed by the ebony deepness of the surrounding black. A mile passed as the driver picked our way through ruts and chuckholes, and another mile and more, a monotonous, jarring journey with no glimpse of Herat yet on the horizon.
Of a sudden, we were each aware that we were no longer on the highway. The jeep was bouncing across undulated mounds, sagebrush swishing by the open sides. We talked at the driver in various languages, asking why we’d left the highway, entreating him to return, trepidation rising as we bounced deeper into trackless desert. Beside me, Rifleman loomed large in the very faint glow of a few dashboard gauges. “Oh, god, this is it,” one of the travelers behind me said. I knew what he meant. At best, we would be robbed and left bereft in the desert, at worst, murdered as well.
A mile or so seemed to pass, and as the jeep topped a mound, an earthen structure materialized, shaped somewhat like a quonset hut. The blank end of the building threw back enough headlight to define it from the swallowing darkness all around. The driver sounded his horn, and soon, a dazzling white light flooded out from the center of the hut, a door opening and letting out the brilliant white glow of hissing pressure lanterns.
The jeep stopped a few feet from the door. Rifleman jumped out, then motioned us towards the hut. The driver was talking and pushing on my shoulder, saying something none of us could understand. First out of the jeep, I was also first into the hut. I stepped through the door, squinting at the bright pressure lanterns hung from the low, rounded roof, facing a long trestle-type table, and then I froze, the traveler entering behind bumping me forward. Grouped at the table were six tall men in Gestapo uniforms: black-wooled, ribboned and medaled, epauletted, leather-belted, weapons-holstered Nazi storm troopers.
Only they weren’t German. They were bearded Afghans. The other travelers pushed in around me as I gawked. They too, stopped and stared. The Gestapo stood behind the table, erect, strict, staring back. One of our group said something in German, and one of the Gestapo said something back, not in German. We sifted through languages and finally found some commonality in elementary Turkish.
“Passports,” our Turkish-speaking traveler said. “He wants to see our passports.” But we still did not comprehend and murmurs of objection floated around our group. Some more rudimentary Turkish was exchanged. “It’s the border patrol,” our interpreter finally said. “We’ve got to get stamped into Afghanistan.”
The jeep driver was motioning for us to sit at the long table as he shouted towards an Afghan at the far end of the room. We sat and laid passports out on the table, then breathed easier when the man the driver had shouted to came forward with a tray of glasses and a large pot of tea. I warmed my hands on the tea glass and tendered my passport down the table with those of the other travelers.
And then a heaping platter of rice pilaf appeared and bowls and spoons, and while the Gestapo-draped guards thumbed our passports, we fell to eating. We ate, they stamped, and more tea was poured. Along one wall of the hut, a high shelf ran its length. Spaced along the shelf were hookahs, the kind with the long hoses that pass around from smoker to smoker. Our driver spoke some more to the tea-man, and he fell to bringing water pipes to the table and lighting them.
The Gestapo-guards watched as we made awkward attempts to draw on the water pipes, and laughed at our ineptitude. They spread among us as we shifted to make room, and gave us lessons in water-piping. At first we were smoking a sweet, rose-flavored tobacco, and as the guards began to congratulate us on getting the water pipes right, the smoke shifted to heavier mixtures, opium-laced hashish perhaps, but I do not know. Thus we drifted through endless glasses of tea, smoking, sipping, arm in arm with latter-day storm troopers.
Gradually, their story emerged. Somewhere in Hitler’s mad march to power, he had decreed that Afghanistan was the true ancestral origin of the Aryan race. He reached out with foreign aid, supplying military training for the warlords that controlled the amalgamation of districts that was Afghanistan. The advisers he sent played dress up, supplying uniforms and attempting to transplant the goose-stepping Gestapo that was then terrorizing Germany. World War II came, and then it went, but good wool uniforms last a long time. Afghanistan, forgotten and at the end of the earth in those days, did what it always does. It carried on. The warlord of that western territory spanning the Herat road had inherited trunks filled with the Gestapo uniforms and liked the look, uncaring or perhaps uninformed of the stigma they carried elsewhere in the world.
Over the decades since, I have spoken with many intrepid travelers who entered Afghanistan at that post on the Herat highway, but none has ever recalled a similar encounter with Nazi-clad patrols. It seems at times that it was a water-pipe dream, but it was not. It was Afghanistan, the end of the earth, where events were to get ever stranger as the years passed, as curious travelers became invading armies, and as I retired to my armchair to contemplate uncommon encounters in places far, far away.
While you’re here, I hope you’ll take a moment to check out my novel set in the tumult of the 1960s. “A Lesion of Dissent” is available at either Amazon.com or Smashwords. com per the links below.
Set in the flash and dash of the turbulent Sixties, “A Lesion of Dissent” is available on Amazon.com and Smashwords.com in any format. You can even download this full-length novel directly to your computer in PDF, no Kindle or Nook Book or IPad necessary.
Here’s a quick synopsis of the storyline:
“A fiery liaison in the sacred chambers of Egypt’s ancient pharaohs while Israeli warplanes scream overhead… frenzy and rioting as vengeful Arabs storm into the streets…and Paul Rhodes’ journey of exile through post-colonial Africa and Asia has just begun. Buffeted by the smuggling, black market deception and patriotic fervor that marked those continents’ passages to independence in the tumultuous Sixties, Paul is impelled country by country back to the US and a stunning, fateful confrontation with the military establishment that stands between him and the woman he loves.”
You can order online at both the Amazon.com or Smashwords.com links below when you click on the book cover of your choice. I hope you enjoy reading A Lesion of Dissent as much as I enjoyed writing it. Let me know what you think. I’d love to hear from you. Thanks in advance – Karl
Money from last year’s sales of “A Lesion of Dissent” at Amazon.com was donated to Water for Ethiopian Gardens, a Peace Corps project. The project aids in sustainable, low-tech agriculture at the grass roots, village level, and relies entirely on private donations. Please make your purchase of “A Lesion of Dissent” via Amazon.com if you’d like your money to help malnourished villagers in Ethiopia. The first chapters of “A Lesion of Dissent” are set in the area served by the project.
You can order online at either the Amazon.com link or Smashwords.com link on the right. I hope you enjoy reading A Lesion of Dissent as much as I enjoyed writing it. Let me know what you think. I’d love to hear from you. Thanks in advance – Karl
Same great novel, your choice of either original art cover
Jomo Kenyatta, father of the Kenyan nation and its first president, shook my hand on a beautiful seaside morning in December, 1967. I was out for a stroll, dressed neatly for a change, and feeling as spiffy as the bright equatorial morning. But strangely, the usually bustling docks of Mombasa Harbor were deserted.
Tied up quayside was an aging cargo ship, its hull black except for splotches of rust, some white lettering, and a maroon stripe marking the water line. In front of the freighter, an armed semicircle of widely-spaced Kenyan soldiers ringed an area the size of several football fields. In those early years of post-colonial Kenya, President Jomo had encouraged British colonial civil servants to stay on and aid in the transition to independence, and while native Kenyans manned the front offices of the bureaucracy, a leftover colonial often sat in the back to cross the T’s and dot the I’s. Thus, when my morning amble took me towards the freighter, no soldier challenged me, assuming that my white skin was a credential for the ceremony about to happen.
The freighter rose high out the water, its dark sides looming far above me as I approached. No gang planks were down, a security measure perhaps, but an on-board crane had its arm hovered over two stout wooden crates, their sides slatted. Standing in each crate was a bull, two Texas Longhorns I was to eventually learn. Crew members stared down from the deck railing and I stared up. An Army captain and some subordinates, wearing ranger hats and dressed in starched shirts, creased shorts and knee socks, clustered near the spot to which the crates would be lowered.
One of the subordinate officers left the group and came to me. “You must come here,” he said and motioned me towards the little knot of officers. “President Jomo will arrive shortly.” I followed him to the group. At the back, one of the subordinates, taller than his colleagues, held a walkie-talkie device. “By him,” my guide said, and so I joined the lanky lieutenant with the radio.
“We bring the cows down when the car arrives,” Radioman said.
“Good,” I said, feeling I was in way over my head, and wishing I were somewhere else, for it was now evident to me that I was a security breach. Some time passed and then the head officer snapped to attention. The rest of the group followed suit, and I corrected my posture. “Car coming,” Radioman said to me. Far up the docks, a black limo had appeared and was headed slowly in our direction.
Radioman spoke into the walkie-talkie. “Start cows,” he said, looking up to the crewmen at the deck railing. Radioman held the walkie-talkie towards me. “Starting cows now,” came crackling out in a thick accent. Radioman looked at me. “Cows starting,” I said. Above, the crew dispersed and the crane began to take up slack in the ropes attached to the crates. The limo slowed to a crawl while the crates were raised and swung over the side of the ship. First one bull and then the other bellowed.
Radioman waited for a signal from his captain, then said, “Bring cows down,” into the walkie-talkie. The crates began to lower, the limo picked up speed, and as the bulls touched down, the car pulled to a stop about twenty feet away. An aide with a camera got out of the front and opened a rear door. Jomo Kenyatta, dressed in the open-shirted Kenyan style, emerged and walked over to the crates. He peered through the slats while the aide snapped pictures.
Cattle are highly valued in native Kenyan society, and the President was making a gift to the people of two Texas Longhorn bulls, meant to introduce new genes into the traditional Kenyan herds. When he was satisfied that the bulls were what he had ordered, he walked over to the captain and talked a bit in Swahili, of which I understood nothing. The President, who had lived and studied in England, and also in colonial prisons, eventually noticed me. “Thank you for helping,” he said in English and made a short step in my direction. The officers in front of me parted and Jomo Kenyatta extended his hand. I came forward, reached out, and shook hands with the first President of Kenya, Leader of the Mau Mau Rebellion, and Father of the Nation. “You’re very welcome,” I said and nodded a little bow.
Shortly the President was back in his limo and driving away. A few of the officers were busy with getting the crated bulls lifted onto a flatbed truck that had rumbled up from further down the docks and others were forming the soldiers into columns for the march back to barracks. I was left standing by the freighter, Radioman still close by, and it occurred to me that almost two hundred years before, George Washington had worn similar titles – First President, Leader of the American Revolution, and Father of the Nation. “Good luck,” I said to Radioman. “I wish you well.” And that is how, quite by accident, I met Jomo Kenyatta and his Texas Longhorns.
Norman Mailer was summering in Provincetown, on Cape Cod, and so was I. He had rented a big house on the beach with a sweeping view of the bay, and I was living in a tiny converted tool shed in a parking lot, two doors west and on the opposite side of the street. I did menial labor twelve hours per day to pay for my next year of college, the Beatles had just exploded across the TV landscape of America, and Norman was partying that summer, hard, late night after late, late night.
We’d often engage in the early morning on the sidewalk in front of his house, I walking towards the touristy core of the town to begin another long day of scraping peeling paint or scrubbing pots, and he leaning against his car. We’d meet in that early part of morning when the squawk of sea gulls is amplified by dawn quietude, and high-hanging fog reflects a silver sheen off the lapping waters of Provincetown Bay. And Norman would glare. Always. As I turned onto the sidewalk, he’d pick up the sound of my steps as they crunched out of the graveled parking lot, rotate his head in my direction, and glare, his eyes locking into mine and then holding firm while I approached and passed.
The first few times I disengaged and cast my focus along the narrow sidewalk ahead. My passage to town was half filled with Norman’s legs, which were bracing him against the car fender on which he leaned his rump, arms crossed across his crumpled sport shirt. Secondly, I tried holding his gaze, nodding, and offering a soft “morning” as I passed. But neither way did he acknowledge me, nor even shift his legs back to give me more space to pass. There was just his glare, intense and never wavering. Discomfit, I took to ignoring him those frequent mornings when he had posted himself on the sidewalk. It mattered not. He glared the same.
We had a mutual friend, and one afternoon I saw Norman and this friend walking towards me on the narrow sidewalk. They were talking with great animation and gesticulation. It happened that I had a message from someone to give to the friend, so I stopped them and delivered the message, then glanced at Norman. Glare, eyes locked into mine.
We had a second mutual friend – my summer girlfriend, his sometimes babysitter. It was from her that I had learned that Norman partied long, hard, and into the dawn. She lived in a house directly across the street from Norman, sharing rent with a group of other college co-eds. One evening, he knocked on her door just as we were ready to go out. “Something’s come up,” he said. “I need a babysitter. Can you do it?”, his tone polite, normal, friendly. She turned towards me behind her, apologizing that she needed the money, and Norman’s gaze followed hers to me. His face transformed. Glare. No mistaking it.
He moved away before Labor Day that year and his house stood empty. I stayed on to catch a last few paydays before my college started up again, and one soft, late summer morning, I walked around to the beach side of Norman’s house. From his deck, there was a wide panoramic view with the rising sun throwing colors on the gentle waves, the sound of water breaking on the beach pilings, a sailboat catching early breezes as its skipper tacked across the bay, and a setting moon faintly visible in the western sky.
I leaned against the deck railing and decided to be late for work that day, wondering why, with such a view, Norman had passed so many mornings on the other side of that house contemplating the sidewalk. I don’t know, and he’s dead, so I never will. But I saw his glare recently, in a TV documentary, a still photograph of his face staring into the camera as a narrator reviewed the turmoil and dissent of the Sixties. It was a photo from late in Norman’s life, the face wizened and leathery, heavy lines etched into the brow and cheeks from hard living. But the glare was there, deep, straight into the camera lens, and frozen now, reminding me of choices he made, that I’ve made, of how very differently we’ve lived our lives, and of how glad I am that I spent that morning on Norman’s deck.
Set in the flash and dash of the turbulent Sixties, “A Lesion of Dissent” is available on Amazon.com and Smashwords.com in any format.
Here’s a quick synopsis of the storyline:
“A fiery liaison in the buried chambers of Egypt’s ancient pharaohs while Israeli warplanes scream overhead… frenzy and rioting as vengeful Arabs storm into the streets…and Paul Rhodes’ life of exile in post-colonial Africa and Asia has just begun. Buffeted by the smuggling, black market deception and patriotic fervor that marked those continents’ passages to independence in the tumultuous Sixties, Paul is impelled country by country to a stunning, fateful confrontation with the government forces that stand between him and the woman he loves.”
You can order online at either the Amazon.com or Smashwords.com link below. Just click on the book cover of your choice. I hope you enjoy reading A Lesion of Dissent as much as I enjoyed writing it. Let me know what you think. I’d love to hear from you. Thanks in advance – Karl
Same great novel, your choice of either original art cover