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Rules for Trading, Pulling a Pinocchio, Taking Time for the Mind, Knowing Who You Need to Please, & How to Eat an Apricot (Reading/Study Notes 6.5.18)

Resource: The Cryptocurrency Trading Bible
Link: https://hackernoon.com/the-cryptocurrency-trading-bible-43d0c57e3fe6

Thoughts/Reflections:

In the world of investing, there are no shortcuts or secrets for getting rich fast and easy. If you want to succeed, treat your investments in knowledge just as seriously as your investments in money. Study like your wealth depends on it. Learn new tricks and techniques. Learn how to identify patterns. Learn the fundamentals of whatever game you play.

Cryptocurrency speculation is a great way to make money, but it’s an even greater way to lose money. No matter how much you study, it helps to go in knowing that the odds are stacked against you not for you.

The only money you should invest in crypto is the money you know for sure that you can afford to lose. Don’t create a budget that depends on you making crypto gains or you’ll bury yourself. Don’t go into debt for cypto investing. $20 that you can burn without blinking an eye will take you much further than $200 that you really need. Small and affordable amounts are not just about playing it safe and protecting your money, but it’s also about keeping your mind in a clear space. The less worried you are about how you’re going to pay your bills or get out of debt, the more reasonable and creative you can be in your investment decision making.

Take full responsibility for your own investment decision making. It doesn’t matter who you receive advice from if you’re not going to do your own research and own the results for yourself. Everyone is wrong in the world of investing. That goes for Warren Buffet, the people you follow on Twitter, your best friend who got you into crypto, and the authors of the books/blogs you read. Make decisions based on the information you’ve carefully evaluated, your own comfort level with risk, what you can afford to lose, and your own gut.

Look for value rather than trends. The best investors place money in things they understand. They don’t chase after every upswing or every opportunity. Stick with what you know and always strive to know a little bit more each day.

Crypto markets rise and fall at a considerably faster pace than stock markets and housing markets. Account for unprecedented volatility.

Your greatest enemy is your own undetected stupidity. You have self-defeating thought patterns about all sorts of things that you don’t even know about. Everyone has this issue. One example is the fact that most people think of themselves as average or good drivers. This can’t be true.

Trading is the most dangerous game, but it’s also the ultimate game. It will teach you more about yourself than anything else. When you risk losing money for the sake of making money, you will learn the real truth about how you think, what you believe, and what you’re made of.

There’s only one way to think about right and wrong when you’re analyzing investment opinions: did that opinion make you money or did it lose you money? That’s all it comes down to. Everything else is rationalization. Your opinion can’t be right in any meaningful sense if it’s losing you money. It’s easy to cry about how wrong the market is, but you’re the one that’s wrong if you’re losing money. You need to be brutally honest with yourself about this or the market will be even more brutal with your money and your ego.

Studying and practicing will not take you to the promised land. You need skin in the game from the very start. You know to know what it feels like to have your heart flutter at the positive possibilities and you need to know what it feels like to have your heart drop at the negative possibilities (or realities). Start small, but start for sure.

Favorite Quotes/Excerpts:

“The secret ingredient is…nothing. Wait, what? That’s right. There is no secret ingredient to getting rich. Anyone who tells you different is selling something.”

“Of course, cryptocurrencies do have some of the best ROIs in history. And you do have a shot at making some good money. So let’s talk about investing in cryptos the right way. How do you make money with cryptocurrencies? Carefully.”

“The very first question you need to ask yourself is, do you have enough extra money to invest? What does extra money mean? While, I’m not a big fan of the nanny-state accredited investor rules of the SEC that let’s only rich people invest as they see fit, nor of the “pattern day trader” rule that requires to you to have $25,000 minimum in order to day trade the traditional markets (which, by the way, does not apply to crypto markets…yet), there is some merit to the rules. Those numbers are arbitrary bullshit but I do agree with the sentiment that led to the creation of those laws. They’re trying to protect people from losing money they don’t have to lose. And since the nanny-state is not here to protect you in the crypto markets you will just have to go ahead and take personal responsibility and protect yourself.”

“Only invest what you can afford to lose.If you don’t have a lot of money, start small. Don’t go maxing out your credit cards or getting a “loan” from that guy your bother knows who sits on the corner outside the bodega on 156th and Broadway. You’ll only get burned.”

“The second question you have to ask yourself is: Are you a buy-and-holder or a trader? These are two very, very different things. By a wide margin, the right strategy for most people is to just buy and hold. Get some well know cryptocurrencies like Bitcoin, Ethereum, Dash, or Litecoin, put them in cold storage, stick them in the sock drawer and forget about them. Don’t read the news. Don’t worry about the wild swings or the predictions of doom from the popular press. Just buy, hold and forget. In a year or two, dig them out and sell some of them and buy a little more with the proceeds. Wash, rinse and repeat until retirement.”

“If you want to trade however, that is a different beast all together. That means you’re looking to get in and out of the market. The rules of the game are simple: Buy low, sell high. Duh, you say. Easier said than done though. There are two parts to this game: Making money. Keeping it. Most people crash and burn on the second part. Everyone makes money in a bull market and then most give it right back afterwards. So does that mean you shouldn’t trade? No way. I love trading!”

“On the days you win, it’s the ultimate rush. You’re a Viking raider, swooping in on unsuspecting villagers and mowing them down with glee. On bad days though, it’s brutal. You’ll lose sleep, hair, friends and money. You’ll be depressed, angry, and scattered brained. So why play at all? Because trading is the ultimate game.”

“The markets are not rational. Nor are people. We are fear based, emotional creatures. Only an ivory tower academic economist would ever think something so utterly ridiculous. First of all, the information is not even close to evenly distributed. We’re all playing with partial information and a fog of war. Even worse, we all have varying degrees of ability to process that information. Meaning all of us are kind of stupid. If you’re not that bright, it doesn’t matter how much info you have, you won’t be able to do shit with it. Go directly to Dunning-Kruger and do not pass go.”

“All of us have stupid, magical belief systems and broken mental heuristics that work against us every single second of our lives. If you ask a group of people how many of them are “above average” drivers, almost everyone will raise their hands. This is impossible. We can’t all be above average but we all believe we are.”

“The problem is most of us are seeing a movie in our heads about life, instead of what’s actually right in front of our noses. To the degree that reality doesn’t match up with what we want to think about it, we go with what we want to think about it. For most humans giving up their belief systems is the same thing as death. They would rather die, literally, than change their mind. That doesn’t work for the market. The markets are a lesson in humility. You will learn to see things as they actually are versus how you imagine them to be or you will get taken out to the woodshed and beaten with a rubber hose. In other words you will lose all your money just like that idiot who sold his car to play the markets. The markets are economic Darwinism and they have no mercy.”

“People get very attached to their opinions. Burn your opinions! Your opinions mean nothing to the market. If you thought a bull market was starting and it turns into a bear, your opinion was wrong. Period. Let it go! Move on! But people love their opinions. They cling to them desperately. We’re just wired that way. Our brains are littered with mental pitfalls. Being “right” when you’re wrong is great way to lose money.”

“New traders lose because they: * Trade too big * Trade without an edge, or in other words — gamble * Over trade * Trade low price junk stocks * Use excessive leverage.”

“Crypto markets move at video game speed. This is one of the reasons the popular press does not understand cryptos. They regularly report that Bitcoin is over and dead for good. It’s hilarious. Check out this article from 99 Bitcoins. Someone writes Bitcoin’s obituary every day. The problem is the pop-press is used to playing the game at slower speeds. It’s as if they were good football players in college only to go to the pros and have guys blow right past them. It’s a totally different level. This is the e-Sports universe.”

“Technical Analysis (aka studying the chart patterns) works pretty damn well in crypto trading. My gut tells me it’s because most of the folks trading cryptos are geeks and we’re prone to liking TA because it makes sense to the engineer brain. That makes them a self-fulfilling prophesy. It also works because there’s lots of machine trading going on. You’ll be trading against bots regularly on the exchanges and they have no choice but to make decisions based on moving averages, pull backs, breakouts and all the other things that TA aficionados love. The other reason it works is because TA is all about psychology. People want to take gains and cut losses. After a certain amount of rise, it’s going to fall. It’s just natural.”

“TA is not a magic eight ball. It does not work all the time. It’s often just junk voodoo. It’s hard to do right, easy to do wrong and prone to all kinds of false signals. Still, it’s a useful tool.”

“The markets are really nothing but the shared hallucination of our collective unconscious, the projection of our hopes, dreams and fears.”

“Investing in what you know is a great mental heuristic. Warren Buffet regularly refuses to invest in all kinds of companies, like the tech stars everyone loves, because he doesn’t understand tech. Because he doesn’t understand it he can’t make a good call ahead of time, so he stays out. If you don’t understand the purpose of a coin, stay out. Don’t buy it because it’s going to the moon and some jackass in a Slack forum told you it’s killer.”

“In crypto, value investing means not buying a bunch of shit coins. ICOs happen all the time and new coins pop onto the market, promising great returns. Some of them will deliver one day. But most of those coins will go to nothing in the next few years.”

“80/20 is the formula. You will never do better than that, even if you manage it for a number of years. Eventually you’ll revert to the mean. That’s statistics baby. And math is God. It runs things around here and everywhere else. And of course, even after you read all these books, try to remember: There is no secret ingredient.”

“The way to get better is to get in the game. There is no substitute for personal experience. There’s an old saying in the ancient game of Go. “To learn Go, first lose 100 games fast.” This is true of everything in life. You have to get into the arena. You’ve got to play the game. Without skin in the game you won’t learn a damn thing.”

“Here’s the deal: You’ll make mistakes. And you’ll learn. That’s the only way.”

Resource: Pulling a Pinocchio; A managing life-hack by Walt Disney
Link: https://www.linkedin.com/pulse/pulling-pinocchio-managing-life-hack-walt-disney-koen-colmbijn

Thoughts/Reflections:

Pulling a Pinocchio refers to the process of pulling an all-nighter or going all in to ensure an important deadline is met and to make sure standards aren’t compromised. The concept is not based on the actual story of Pinocchio, but on the story behind the making of the film. Pinocchio was Disney’s second major motion film and there was a lot of pressure for it to do well at the box office. Low or mediocre quality was not an option. Moreover, since there was a tight and non-negotiable deadline for getting the movie into the cinema, there was an extremely low margin of error. This made for some disappointing news when Walt Disney was unsatisfied with the results. The team had to completely remake the film from scratch within a few months to meet the deadline. They not only finished in time, but their work went on to make history.

The essence of pulling a Pinocchio is less about staying up all night to get things done. It’s more about having the integrity and determination to make sure things get done with the high level of quality you promised to deliver. It’s based on the courage to speak up and tell people when something isn’t good enough even if you know it’s going to cost everyone some time.

Every night doesn’t need to be an all-nighter. Most nights don’t need to be all-nighters. And yet, there is a time and a place for just stepping up and doing what you said you would do. Sometimes, that demands a work day (or a series of work days) that feels a lot more like an all-nighter than anything else.

In order to pull a Pinocchio, you have to completely trust your team. Pinocchio’s don’t work if half the crew is bitter and complaining about something they don’t believe it. Pinocchio’s have to be driven by a sense of ownership and by a sense of commitment to great work.

The best Pinocchio is the one you don’t have to pull because you planned ahead, checked in frequently, and kept yourself out of a position where you needed to pull all-nighters.

Quotes/Excerpts:

“the story of Pinocchio can teach us a valuable lesson. Although in this case, I am not talking about the importance of telling the truth or being brave, respectful and generous. The greatest lesson, perhaps, is learned from its production process and for that we have to rewind to the events that took place a little over 75 years ago.”

“I’m pulling a Pinocchio” Our marketing manager Tim said to me as he entered my office last week. Something I had not heard in quite a while… I felt the sudden but expected burst of adrenaline but the panic was quickly replaced by a few dozen questions about his decision. I gave myself a few moments to recollect as I told him: “Do what you have to do”. After all, pulling a Pinocchio is not just about jumping into the deep or simply having the guts to do what needs to be done… In essence, it is about trust. Of all the valuable lessons that Walt Disney taught to the world this one is perhaps one of the most inspiring.

“Pinocchio was to be the second animated big screen movie from Disney Studios. Having set the standard extremely high with Snow White they were already under tremendous pressure to turn this film into a box office hit. Back in those days, every frame was hand drawn which required an incredible amount of time and labour. Irrevocable deadlines with cinemas were set to cover the costs and the point of no return was reached. With only a few months left they assembled every frame and viewed the film. When they saw the result, Walt Disney was not overly fond of what the movie had become. With little time left and these seemingly irreversible errors, they made a bold and fearless decision. They decided the movie needed meticulous changes to meet the standards of Disney Studios. Within a few months the team almost completely remade the Pinocchio movie in a frenzy of sleepless nights and a lot of coffee (I would imagine). What was left was the masterpiece that poured from their canvas onto the big screen and into history.”

“the necessity of pulling a Pinocchio occurs more often than one would expect. In our own experience this is inevitable in a creation process and I daresay we do not stand alone on this one.”

“knowing when to start over, in the face of overwhelming odds, demands for truly listening to your heart. Often you just know something is not good enough. Dare to listen to yourself, dare to tell the people you are working with to start over.”

“the act of cutting the Gordian knot and actually making the decision to pull a Pinocchio calls for boldness and maybe a touch of madness. Prepare yourself by including check-ups in your planning so that you can discover possible hiccups early on. You might lose the invested time but if you insist on quality, dare to go for it.”

“Finally, the single most important thing to be learned is that it is not about bravery nor know-how. To take that leap of faith together and achieve your common goal on nothing but hard work and a lifetime supply of coffee requires something more than that. It takes trust in the people around you. Absolute confidence in each and every member of your team. Pulling a Pinocchio, especially when your team suggests it, is the way to go both for quality’s sake, as well as for teamspirit. Trusting each other, that is the lesson to be learned.”

Resource: WE ARE WASTING OUR BRAINS ON BULLSHIT (And Other Darling Sentiments)
Link: https://www.themiddlefingerproject.org/we-are-wasting-our-brains-on-bullshit-and-other-darling-sentiments/

Thoughts/Reflections:

Not knowing what you want is a shame because it means you’ve gone way too long without paying attention to yourself. It’s like living with a lover for a couple of years and having zero idea of what kind of food they eat. If you’re in that situation, you’re either too busy or you’re just not paying attention.

Idle time for the mind is where self-knowledge comes from, but we’ve been conditioned to feel guilty about that. We use our minds to get things done, but we fail to include,meditation, visualization, fantasy, speculation, guessing, introspecting, relaxing, and exploring on our to-do list. This is at our own peril.

You can’t find the right kind of work nor can you work in the right kind of way without substantial “me time” for your mind. The paradox is this: we put off things like recreational reflection and reading because we see ourselves as having too many things to do. And this just makes us dumber and less connected with ourselves. So we end up doing things inefficiently, or unintelligently, or uncreatively. When we deprive our minds of this, we always suffer for it.

Get rid of the guilt and make some “me time” for your mind.

Quotes:

“WE ARE WASTING OUR BRAINS. We’re using them as storage units, there to process practical day-to-day tasks, but never something that nourishes us from the inside. Instead, we run our brains as if they were a factory, with thoughts rolling by on conveyor belts in order to be as productive as possible. Forget idle hands—our generation is terrified of idle brains. But the idle brain is sorely underrated—and in fact, it’s fucking fundamental when it comes to creating a creative, pleasurable, meaningful life.”

“To my future artists, and writers, and creatives, and travelers, and dreamers, and big thinkers: Guilt is a hologram. Make space for yourself. The only thing that matters is not what you did with your days, but that you deeply enjoyed living them.”

Source: “It’s not for everyone”
Link: https://seths.blog/2018/06/its-not-for-everyone/

Thoughts/Reflections:

What is your product and who is it for? What is your work and who it it for? If the answer is “everyone”, you’re missing the mark. What unique problem are you solving? What universal problem are you solving in a unique way? You need to be able to answer one of those two. The end-game isn’t to meet every need or every person. It’s to satisfy the concerns or solve the problems of those who are the best fit for what you’re passionate about providing.

Quotes:

“It’s not for everyone” “…but it might be for you.” That’s a home run. The stuff that’s for everyone, that’s easy to click, sniff, share, produce and learn–that stuff ends up having no character. It’s not memorable. Tater tots are for everyone. But would you miss them if they were gone? The goal isn’t to serve everyone. The goal is to serve the right people.”

Resource: How to Eat an Apricot: Diane Ackerman on Art, Science, and Wonder
Link: https://www.brainpickings.org/2018/06/05/diane-ackerman-the-consolation-of-apricots/

Reflections/Notes:

Beautiful poem. I simply enjoyed it. I don’t want to force a self-help lesson out its reading. It was a poem about nature, about how to eat apricots, about mindfulness, about experience the apricot and the holding of it in your hand and the environmental setting as all part of the same experience. Here eating is presented as an extension of, and expression of, and an element encompassed by the broader circle of life that makes our universe what it is.

Science and art are both the study of nature. As human beings, we are part of nature. And the stuff of science (ie gravity, heat, neutrons) are as much a part of nature as the stuff of poems (ie waterfalls, tall trees, and beautiful sunsets).

Quotes/Excerpts:

““Science describes accurately from outside, poetry describes accurately from inside. Science explicates, poetry implicates. Both celebrate what they describe.” -Ursula K. Le Guin

“Ever since I was a child, I wanted to be a nature poet — it’s just that what I meant by “nature” included everything from quarks to exoplanets to water bears and neurons. Science and art both seem to be throwing buckets of light into the dark corners of existence, and I was enthralled. It didn’t make sense that we would be separating science and art, or that we would be separating nature and human nature. It seemed like we should be taking the universe literally — as one verse.”

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