"It is in your moments of Decision that your Destiny is shaped" - Anthony Robbins

  • Life is a series of decisions. Avoid making stupid decisions, make the right ones a few times, and there’s a good chance you’ll end up where you want in life. It’s a simple formula, but it’s by no means an easy thing to do.

  • Investing involves making Sound Decisions. Warren Buffett wrote that 2 things an investor needs to succeed are:

    • Good Decision-making skills; 

    • Discipline when under pressure

  • Robert Rubin offered 4 principles for Decision Making

    1. The only Certainty is that there is No Certainty

    2. Decisions are a matter of weighting Probabilities

    3. Despite Uncertainty, we must Act

    4. Judge decisions not only on Results, but also on how they were made

  • Investment Decisions involve Uncertainty. When we think a decision is obvious, there is a risk that we no longer have a balanced view of the range of possibilities.

  • The  correctness of a decision can’t be judged from the outcome. Because of the randomness at work in the world and the unpredictability of the future, lots of bad decisions lead to good results, and lots of good decisions end in failure. 

  • Trading Decisions:

 

  1. Markets - WHAT to buy / sell

  2. Position Sizing - HOW MUCH to buy / sell

  3. Entries - WHEN to buy / sell

  4. Stops - WHEN TO GET OUT of a losing position

  5. Exits - WHEN TO GET OUT of a winning position

  6. Tactics - HOW to buy / sell

  • Make every decision a quality choice. Each time you are about to make a trade, ask yourself, "if I could only make 10 trades per year, would this be one of them?" That's how to trade like a champion. Have a reason for every action. If you always have a good reason for your actions, you're sure to be making better decisions;

  • Decision Journals are designed to create a log of the decisions you’ve made and why you made them. To both capture a snapshot of your thinking at the start, then use the notes to improve your decision making process when you review it later. Before make a decision, write down Why someone would want to take the opposite side of our transaction.

"You only Think you Know... And most of your Actions are based on Incomplete knowledge and you really don't know what it is all about..." - Richard Feynman

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© 2016 by aTrader