I’ve read a few option books.
THANKS... This is probably the most comprehensive "greeks" article/book I’ve read.

Wonderful blog. …..
A wonder wealth of knowledge there. Thanks so much for your kindness in publishing it!

Thank you very much for the most concise and simplest option intro. Highly recommended.

So far, yours is the best blog/site on basic options notes in the web that I have chanced upon.

Saturday, October 11, 2008

GARTMAN’S RULES OF TRADING – Part 1: Trading Psychology

22 Trading Rules by Dennis Gartman, Editor/Publisher of The Gartman Letter:
(I was just trying to group the rules based on their topics)

TRADING PSYCHOLOGY

1. Capital comes in two varieties: Mental and that which is in your pocket or account.
Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.

2. "Markets can remain illogical longer than you or I can remain solvent", according to our good friend, Dr. A. Gary Shilling.
Illogic often reigns and markets are enormously inefficient despite what the academics believe.

3. An understanding of mass psychology is often more important than an understanding of economics.
Markets are driven by human beings making human errors and also making super-human insights.

4. The market is the sum total of the wisdom ... and the ignorance...of all of those who deal in it; and we dare not argue with the market's wisdom.
If we learn nothing more than this we've learned much indeed.

5. The hard trade is the right trade: If it is easy to sell, don't; and if it is easy to buy, don't.
Do the trade that is hard to do and that which the crowd finds objectionable.
Peter Steidelmeyer taught us this twenty five years ago and it holds truer now than then.

6. There is never one cockroach: Bad news begets bad news, which begets even worse news.

Continue to Part 2: Trading System & Money Management

Related Articles:
* A Chance to Learn from World Class Trading Experts For FREE You Should Not Miss
* Why Trading Psychology Is Very Important
* Reverse Psychology For Success

1 comments:

Bagfields said...

Rule 1 should be, that 85 % of options expire worthless, so it is better to sell options than buy.

Implied volatility at this very moment (oct 2008) is very high so one can get very good premiums !
This means that one can buy shares with a considerable discount if you write put options/leaps.
No call writes please