NEW YORK, Dec 8 — Topping Nicholas Colas’s list of ideas to keep in mind while trading: The all important notion that “no one is bigger than the market.”
That line from Colas, the co-founder of DataTrek Research, of course is reminiscent of the line attributed to John Maynard Keynes that the market can stay irrational longer than an investor can stay solvent.
“This is especially true with cryptocurrencies,” Colas said. “They are — and will continue to be — extremely leaky in terms of information flow. You will never, ever be the first to know anything.”
The next rules are to have a plan and trade that plan, then to set targets, stops and time frames and write them down before you buy anything.
Colas’s fourth rule: Don’t ever turn a trade into an investment. Even if it’s a small position, sell a loser — he says that’s more about managing time than managing profit-and-loss. He quotes Bob Dylan here: “If something’s not right, it’s wrong.”
“Know yourself” is the next point, and Colas says that relates to risk and volatility tolerance, and trading styles.
“In the end, that last point should inform all others,” Colas says. — Bloomberg