I just finished re-reading The Laws Of Trading by Agustin Lebron.
It's one of the best books for trading I've read.
Here are the 6 laws you need to know:
It's one of the best books for trading I've read.
Here are the 6 laws you need to know:
Before we jump into the laws that helped re-shape my trading,
Why did Agustin Lebron call them laws?
Why did Agustin Lebron call them laws?
1. Motivation.
Know why you're trading. Self-awareness is key.
Many trade for the wrong reasons like boredom or thrill.
Examine your true motivations and align them with sound principles.
Your 'why' shapes everything.
Know why you're trading. Self-awareness is key.
Many trade for the wrong reasons like boredom or thrill.
Examine your true motivations and align them with sound principles.
Your 'why' shapes everything.
2. Take only risks you're paid for, hedge the rest.
Every trade has multiple risks, identify your edge and isolate it.
Unexpected risks can overwhelm profits, so be sure to use tools like options or futures to neutralize unwanted exposures.
Risk management is crucial.
Every trade has multiple risks, identify your edge and isolate it.
Unexpected risks can overwhelm profits, so be sure to use tools like options or futures to neutralize unwanted exposures.
Risk management is crucial.
3. If you can't explain your edge in five minutes, you don't have a very good one.
A real edge is simple and clear.
Complex edges often suffer from overfitting and biases.
You are simply looking for a set of rules that have a positive expected value.
(there are exceptions.)
A real edge is simple and clear.
Complex edges often suffer from overfitting and biases.
You are simply looking for a set of rules that have a positive expected value.
(there are exceptions.)
4. The impossible can happen.
Be prepared for unprecedented events and maintain your humility.
Stress test your strategies against extreme scenarios such as the 2008 financial crisis.
Remember, enough people relying on something being true can make it false.
Be prepared for unprecedented events and maintain your humility.
Stress test your strategies against extreme scenarios such as the 2008 financial crisis.
Remember, enough people relying on something being true can make it false.
5. Data skills are non-negotiable.
Success hinges on extracting insights from this sea of data. You must be able to have access to and analyze large datasets, and leverage technology to gain an edge.
Embrace the role of tech and data capabilities and strive to stay ahead.
Success hinges on extracting insights from this sea of data. You must be able to have access to and analyze large datasets, and leverage technology to gain an edge.
Embrace the role of tech and data capabilities and strive to stay ahead.
If you are interested in staying ahead through data and automating your trading without needing to know how to code,
Click the link in my bio.
Click the link in my bio.
6. Keep an eye on your costs.
Markets are fiercely competitive; huge edges don't last.
Costs such as: visible (fees, spreads) and invisible (market impact, trade decay). Traders often underestimate costs or overestimate the edge.
Analyze all costs, including opportunity costs.
Markets are fiercely competitive; huge edges don't last.
Costs such as: visible (fees, spreads) and invisible (market impact, trade decay). Traders often underestimate costs or overestimate the edge.
Analyze all costs, including opportunity costs.
If you find this type of content valuable & want more every week:
1. Follow me @GoshawkTrades for more.
2. Jump to the top & retweet.
1. Follow me @GoshawkTrades for more.
2. Jump to the top & retweet.
And if you are a trader with 2+ years of experience, who wants to take their trading to the next level with advanced backtesting and automation.
Book a call with me below:
unbiasedtrading.info
Book a call with me below:
unbiasedtrading.info
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