Much of trading is counter intuitive -what feels right and sensible to do is often not what makes you money. Looking at overbought and oversold levels and trying to pick those individual turning points is very very difficult. Looking at an established trend and simply saying I think this market will continue moving in that same direction is much easier way of trading.
One of the quickest ways to go bankrupt in trading is to try and get your own back on the market. Trading is simply a game of probability management. We are dealing in probabilities — not certainties. What you do need to do is eliminate all emotions from trading. It is simply a game of statistics. This is one of the reasons why I far prefer to trade automated algorithmic systems nowadays.
The computer is much wiser than us because it does not personalise its losses. That is how the roulette wheel in a casino works — the more they spin the wheel the more money they will eventually make and that is also how professional traders work. We concentrate on the numbers and on nothing else. The following short quiz consists of 4 question and will tell you whether you are qualified to be a professional trader. The correct answer is: Open the refrigerator, put in the bond trader and close the door.
This question tests whether you tend to do simple things in an overly complicated way. Open the refrigerator, put in the stock trader and close the refrigerator…… Wrong Answer. Correct Answer: Open the refrigerator, take out the bond trader, put in the stock trader and close the door. This tests your ability to think through the repercussions of your previous actions.
Legendary trader Warren Buffet is hosting a professional trader conference. All the pros attend except one. Which one does not attend? Correct Answer: The stock trader. The stock trader is in the refrigerator. This tests your memory. OK, even if you did not answer the first three questions correctly, you still have one more chance to show your true abilities.
You must sell contracts in a thinly traded market. But thin markets are known for their horrible slippage. How do you manage it? Correct Answer: You walk onto the exchange floor and sell to the public. All the other traders are attending the Warren Buffet meeting. This tests whether you learn quickly from your mistakes. But many preschoolers got several correct answers. Anderson Consulting says this conclusively disproves the theory that most professional traders have the brains of a four year old!
Better still is to ask them to become your Mentor. This is exactly the path I travelled when I first started trading over 30 years ago. One of the biggest mistakes new traders make is that they fail to differentiate between the marketing men and their paid actors and real life real money traders.
The vast majority of courses, seminars and systems are produced and sold by exactly those sorts of people. Honestly that is the simple truth. I realise that not everybody can afford a personal trading mentor however we can all afford to read a few books from credible sources. We can all learn much from reading this sort of quality material. It is similar to market wizards in that it contains a series of interviews with real money real-life successful traders — well worth the price.
A classic case of the dreaded unknown unknowns that I often refer to. This is often because they make the common mistake of believing that something that this is endlessly repeated from different sources must be correct. This would only be the case if the sources themselves are credible and the problem is the vast majority of sources are not.
Following on from the earlier test here is another example of the biases that can thwart us in our trading ambitions. I think as with most other things in life almost anybody can succeed if they really want to and are prepared to pursue the goal. How much does the ball cost? Every day the patch doubles in size. The answers are at the bottom of the page. It is known as a cognitive reflection test. It is a good question and one that needs to be asked.
Those that follow me will know I primarily trade fully automated computerised trading systems. The advantage of these systems is that you can program up the system rules and then asked a computer to tell you how much money you would have made over any selected test period. This takes the guesswork out of trading. Here is the code for the long entries. When these two conditions are met we buy at the market on the next bar.
We sell short using mirror images of the exact same code. So this is very very simple indeed and you do not have yards and yards of code and all sorts of subjective decisions to make. Each bar the computer calculates the four values and makes a decision for you whether you need to enter the trade or not. The graph shows the cumulative profits earned over that approximate seven-year period.
The absolute sums that you make are all down to your position sizing. However before you can do that you need a system with a positive expectancy. A system that makes you money and makes you money in as painless a fashion as possible. This is demonstrated by the smoothness of the graph. This graph is smooth and consistent over the full seven-year period indicating that is consistently been making money day in day out year in year out and that individual losses have been relatively small.
This makes it an easy system to trade and a great system for applying more aggressive position sizing techniques. Again the graph is relatively smooth and consistently moving upwards which is exactly what we want to see. Incidentally a simple variation of this system also works well on the stock index futures Russell market. This is a very good indication of the reliability and robustness of the method.
The point of the article? Well you have seen how simple the rules are and you have seen the results it generates and it is a system that you can actually buy today. So the answer to the original question is yes we can absolutely make money in the markets from trading very simple methods indeed. Whether you buy a system from me or attend one of my training courses you will learn what techniques work, why they work and how they can be applied to the market.
How much time and money are you wasting or have you wasted trying to design your own trading systems or buying in unproven and untested methods only to find that they do not work and more importantly cannot work. That really is not the way you will achieve trading success you can waste thousands of dollars and hundreds of hours in misdirected efforts.
If you do it this way your chances of succeeding in trading are improved by orders of magnitude otherwise novice traders are simply wandering around a darkened room not really knowing what they are doing or why they are doing it and just bumping into one obstacle after another until they run out of energy or money.
It does not need to be like that. If you would like to see short videos on some of my system that are currently for sale then follow these links. One of the areas of Forex trading that I find novices are somewhat confused about is the tax treatment of gains or losses made from trading Forex or futures. As with all areas of UK tax this can be really quite complex and you should always consult your accountant or financial adviser for the full information.
However to keep it simple the rules are more or less as follows:. For individual traders it is close to impossible to have trading gains or losses treated in the same way as self-employed profits and losses are i. The reason for this is that under schedule D people could set off losses from one trade against profits made from another trade.
After that gains are taxed at two different rates. These rates are what is known as top sliced. Ie in effect your capital gains are added to your taxable income to calculate what proportion of your gains are taxed at which of the two rates for capital gains. Now the good news: Gains made from betting or lottery winnings are free of all capital gains tax. If you trade through a spread betting company, as the name implies, you are in the eyes of our good friends the Inland Revenue actually betting rather than trading.
The reason for this difference in treatment is in the way that those companies are taxed themselves. So why would anybody in the UK put trades through Forex or futures brokers when if they put the same trades through a spread betting company they would pay no tax on the gains.? And yes you would be right there are such opportunities! The simple answer, which is covered elsewhere, is that in trading if one ignores commissions then it is a zero-sum game.
What I lose today somebody else somewhere in the world must have gained and vice versa. What makes trading so exciting and attractive is that this redistribution between parties is asymmetric. At first sight this does not seem very attractive but what it means is that those that do win in trading are collecting all of the losses made by a majority of the participators. It is for this reason that you can make very substantial sums of money in trading.
The losers are financing the winners but there are far more losers out there than winners. So for those of us who can get into the winners enclosure will likely make far larger sums of money than we ever could in most other professions or trades. Truthfully the big winners tend to keep themselves to themselves in the same way as a lottery winners generally choose not to publicise the fact for a myriad very good reason.
However an article in one of the papers just recently drew attention to the trader Chris Rokos. Chris is a year-old UK trader that I am sure most of us have never heard of. However in other respects his background and career progression appear fairly normal. So he apparently started minting it when he was actually under 30 years old. Now you and I are never going to be in that class although there are plenty out there that are.
Fixed fractional is the standard position sizing method recommended to most traders. With this method the trader risks a fixed percentage of their trading capital on each trade. This is a good workaday solution however it tends to result in somewhat slower equity growth than can be possible with many other methods. We want equity growth to go geometric as soon as possible so this method is somewhat of a drag on that escalation. One simple variation on this method that does show dramatic improvements in equity growth is what is known as the profit risk method.
This is simply a slightly turbocharged version of fixed fractional. It still remains consistent with one of the undeniable rules in trading which is that you must look after your own capital and treat it as gold dust. The first portion is your own trading capital that you start with and the second portion is any profits that you make. It then applies two different percentages to those two trading pots to calculate how much to risk on the next trade.
You will use a relatively conservative percentage on your own capital but a more aggressive percentage on your trading profits portion of total capital. This is just one simple way of improving on the standard fixed fractional position sizing method. There are several other much more aggressive position sizing techniques that one can use that are far superior even to the profit risk method.
Certainly the earning potential in trading is far more than you could greater than you could earn in any other normal career or profession. The table in the manual is designed to illustrate how money in trading is really made. It is not really made by being right all the time in your trades none of us can do that. It is made by having a small statistical edge and then exploiting it using standard compounding theory plus one or two other techniques.
The position sizing side of trading is a fascinating area for research although often much overlooked by novices. This is absolutely the wrong thing to do. Position sizing deserves much more attention than most people are prepared to give it. Both of the courses that I run include a separate manual detailing several very aggressive position sizing techniques that professional traders are using day in day out. One of the problems at novices have is that they have an incomplete picture of how the trading game fits together.
There are several critical components that most people are either not aware of or do not pay sufficient attention to. Position sizing is one of these areas. Well you would be absolutely wrong there are several infinitely better ways of managing your positions than using simple fixed fractional especially when you are trading shorter term.
Long-term trend following has got one of the longest real-time track records of working in the markets with real money of any of the trading methodologies. Some of the richest traders in the world have made their money using long-term trend following techniques to trade primarily the commodities markets. We all know the Turtles story. But there are many many other traders who have made significant sums of money from long-term trend following.
That all changed around when the techniques most definitely stopped working. If you were lucky you were trading method that still just about broke even. If you were unlucky you lost a lot of money. What we do know is that long-term trend following will start working again when sufficient people believe it is finished and switch to other trading methods. This may well now have taken place. If you look at the attached equity curve going back to for a pretty standard commodity trading system you can see exactly what I mean.
At this stage most traders including myself would have switched funds into other types of trading. As more and more traders got off the trend following carousel and started to take the opposite side of those trades this then allowed trend following to start working again. We can see from the equity curve above that since around the start of we have had good consistent results for trend following and that may well now continue.
Over the coming months I will most definitely be getting back into commodity trading and will add a couple of simple long-term trend following systems to the systems that I already sell for day trading and swing trading. Is such a trading method viable for retail traders? Please do not fall into this trap. Market risk: You may do all of your research and correctly pick a genuinely great individual company that should perform well in the future.
All of the successful fund managers will have long losing streaks, sometimes lasting 6 months to a year. And then They let their winners run and they wipe out all of their losses. It is how trading works. With your involvement you can't fail. Tough people do. You imagine what you desire, and then you believe it to be true.
Every dream could be realized by those self-disciplined enough to believe it. If you are not prepared to die, then you are not prepared to live. No one gets out alive anyway. Although men owe a duty to themselves to make the best of their lives on earth, having thus sincerely exerted themselves, they should cheerfully accept their lot and exercise ingenuity in making the most of that which has fallen to their hands.
You only become truly rich the day you possess something that money cannot buy. Inner Peace. Common sense. It is the only gold that enhances our potential in terms of what we can offer the world. Fret not yourself because of the prosperity of the ungodly; fear not those who plot evil; let the soul turn away from sin and put your whole trust in the God of salvation.
The weary soul of the wandering mortal finds eternal rest in the arms of the Most High; the wise man hungers for the divine embrace; the earth child longs for the security of the arms of the Universal Father. The noble man seeks for that high estate wherein the soul of the mortal blends with the spirit of the Supreme. God is just: What fruit we receive not from our plantings in this world we shall receive in the next.
If we strip them of these masks their own countenance appears and the fear they produce disappears. This is true even of death. Since every day a little of our life is taken from us - since we are dying every day - the final hour when we cease to exist does not of itself bring death; it merely completes the death process. The horrors connected with it are a matter of imagination.
They vanish when the mask is taken from the image of death. You are born into the world, but no amount of anxiety and no manifestation of impatience will help you to grow up. You must, in all such matters, wait upon time. Time alone will ripen the green fruit upon the tree. Season follows season and sundown follows sunrise only with the passing of time.
I am now on the way to Rome with you and your father, and that is sufficient for today. My tomorrow is wholly in the hands of my Father in heaven. To continue to ask never allows the process to move beyond the asking stage. First ask, assume the answer is on its way and then continue to express appreciation that it is happening in its own perfect wisdom and timing. That 'wisdom and timing' is greatly influenced by the one asking and how well that awareness is able to follow through with the two remaining steps after the initial asking.
This is often called prayer. Nothing can happen until there is first asking. Then the next two steps, assuming it is happening continued FOCUS of intent and expression of appreciation allowance controls the manifestation. It is that simple! A few additional details are helpful. Ask within a framework that allows what might be called 'Divine Intelligence' or thought thinking to fill in the details. Doubt destroys results; trust insures them. Sorrow cannot exist in the face of the consciousness of divine duty faithfully performed.
Your purpose has been thoroughly proved; your faith has been tested. You are known to be disappointment proof. Not even the failure to discern the Universal Father can shake the faith or seriously disturb the trust of an ascendant mortal who has passed through the experience that all must traverse in order to attain the perfect spheres of Havona.
By the time you reach Havona, your sincerity has become sublime. Perfection of purpose and divinity of desire, with steadfastness of faith, have secured your entrance to the settled abodes of eternity; your deliverance from the uncertainties of time is full and complete; and now must you come face to face with the problems of Havona and the immensities of Paradise, to meet which you have so long been in training in the experiential epochs of time on the world schools of space.
Now must the pilgrim helpers begin the work of developing that perfection of understanding and that technique of comprehension which are so indispensable to Paradise perfection of personality. Willingness to believe is the key to Havona. The acceptance of sonship, co-operation with the indwelling Adjuster, is the price of evolutionary survival. The events of time and the struggles of material existence are but the transient scaffolding which bridges over to the other side, to the promised land of spiritual reality and supernal existence.
Of course, you mortals find it difficult to grasp the idea of an eternal purpose; you are virtually unable to comprehend the thought of eternity, something never beginning and never ending. Everything familiar to you has an end. And it would appear that a series of such experiences, lives, ages, or epochs, when successively arranged, constitutes a straightaway drive, an isolated event of time flashing momentarily across the infinite face of eternity.
But when we look at all this from behind the scenes, a more comprehensive view and a more complete understanding suggest that such an explanation is inadequate, disconnected, and wholly unsuited properly to account for, and otherwise to correlate, the transactions of time with the underlying purposes and basic reactions of eternity. As regards the sectors of time connected with, and forming a part of, the cycle of eternity, we are forced to recognize that such temporary epochs are born, live, and die just as the temporary beings of time are born, live, and die.
Most human beings die because, having failed to achieve the spirit level of Adjuster fusion, the metamorphosis of death constitutes the only possible procedure whereby they may escape the fetters of time and the bonds of material creation, thereby being enabled to strike spiritual step with the progressive procession of eternity. Having survived the trial life of time and material existence, it becomes possible for you to continue on in touch with, even as a part of, eternity, swinging on forever with the worlds of space around the circle of the eternal ages.
Urantia Book When they find God, they have found everything. Odoyevsky, Russian philosopher "The height of sophistication is simplicity. Clare Boothe Luce, American author, politician, U. Germain, — "This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man. Steinhardt is very pragmatic and believes that the most important part of learning comes from one's own mistakes.
Investors learn from their bad experiences and become aware of what works and what does not. This allows the commitment to the whole investment process to be strong, which is a requirement in a competitive world. Basically, investment is about brain and heart.
Investment is a continuous process requiring supervision and action even before some particular asset is selected and added to a portfolio. Constant research is always required to gain an advantage over the market in order to "sense a major change coming in a situation, before anyone else". Sensing the market before all others do has always been a top priority for Steinhardt; it is this that led him to go over his firm's portfolio six times a day, and rendered him the sobriquet Captain Ahab.
It is a good idea to gather as much information as possible before entering any single trade, but the available information will never be complete or perfect. Investors need to be trained to work on the facts, figure out what does matter, and take the right trading decisions before all others gain awareness of the situation. They then need to have the courage to put sufficient money behind the trade to achieve a meaningful outcome.
Over the years, investors develop and refine an ability to take the best decisions on their intuition. But this intuition doesn't come from a gut feeling or a hunch. Rather, it is a complex process deriving from the investor's cumulative learning over the years. It's wisdom, like that of a fruit seller guessing weights without a scale. It's an educated intuition. After spending so much time and effort researching an asset, investors must make sure that the rewards from the money at risk are meaningful.
Timing is everything. Just because sentiment is very bullish, which is usually the case near market tops, it doesn't mean it can't be even more bullish the next day the Nifty-Fifty during the s is a good example of this. Trends often last longer than you can stay solvent betting against them. Investors need a strong instinct for the markets, which takes time to develop and effort to improve.
Past experience trading the markets is key, as is knowledge acquired through deep research. Steinhardt doesn't believe in pre-set rules. For him, stop-loss orders, buying on weakness selling on strength breakouts and breakdowns, as well as charts and technical analysis, are all superfluous to a successful strategy. It has a fantastic chart.
The chart has a base like this, and then if it goes up a little bit more, boy it is a real breakout, blah, blah, blah, blah. They all seem the same to me". Fundamentals and market timing is what matters the most. And, when the right opportunity surges, investors should embrace it without fear, being flexible enough to be net short as easily as they can be net long, and having the boldness to take on large meaningful positions.
Only take seriously the advice of others whom you greatly respect. My concern is about life before death. And the biggest barrier is psychological. It is you. That means you have to give up something to get something. He is not as stupid as you may think.
And the more you have, the easier it is to give away. Just keep blundering along. The product of your quest for perfection is… paralysis. Cut your losses, kick the cuttings out of your way, and move on. Try to be different. Or better yet, be first! High self-esteem gives you the power of confidence to take chances. Matthew Todorovski Angelito Cartagena Best of luck!
Conversely, if you have a good system you can start with small money and easily become rich. Vladimir Gerasymchuk Thanks Vladimir. And here I was thinking I was breaking records. Arnold Bobrinskiy Bluefox Most of all I was curious how they intended to pay for everything. Now, because I graduated from the Third Grade, I apparently have an unfair advantage when looking at the numbers. But with this BS monkey math that passes as legitimate public policy, they make the numbers whatever they want them to be.
Who knew that 2 cents could go so far? It dwarfs the cost of all of her other plans combined. But not to worry! This is probably the biggest logical fallacy of all. The stock market is going to drop. And if the stock market drops, the amount of wealth held by ultra-millionaires will drop too. This is pretty easy to understand. So, sure, they collect more corporate tax. The wealth tax and corporate tax are like a see-saw; as one goes up, the amount of money you collect from the other goes down.
But, of course, these Bolsheviks fail to understand this concept. Warren wants to provide Medicare for All. So even though the current program is almost broke, and the amount of money needed to provide Medicare for All is nearly 20x greater than the projected revenue from her wealth tax, she still pretends that this is a viable option. He meant that the idea of eradicating poverty And sure, free university, no more debt, free child care, etc.
Becoming the starting quarterback of the Dallas Cowboys also sounds like a nice idea. Sending Justin Bieber on a one-way trip to Mars sounds like a nice idea. That sounds like a nice idea too. But the reality is that someone has to pay for this stuff. Free healthcare, free university tuition, free childcare, Universal Basic Income, etc. Everyone pays out the nose And even those people had the sense to abandon their wealth tax.
The feudal system had officially ended with the unification of Italy a few decades earlier. The vast majority of southern Italians were farm workers. But the landlords who still controlled most of the land charged high rents, paid little, and employment was unsteady and unreliable. These workers lived in one room houses without running water, plagued by disease.
Sector News. All Analysis. Stock Picks. All stock picks. My Portfolio. My Watchlists. Investment themes. Top News. Top Fundamentals. Top Technicals. Top Movers. Investment selections. Technical Rankings. Fundamental Rankings. Stock Screener Home. MarketScreener tools. Dynamic chart. Our Services. MarketScreener Portfolios. Arnold T. Kondrat previously was Director at Kuuhubb, Inc. Gentor Resources Inc. Donat K. Madilo Loncor Resources Inc. John Barker Loncor Resources Inc. Madilo Geoffrey Guy Farr.
Zheng Quan Chen. All rights reserved. Log in E-mail. Developing skills will take time. Waiting for the right trade opportunities requires patience. Entering and exiting a trade at the right moment requires patience.
Discipline is also a virtue, and it means doing the things you need to do to progress and get better…. Journaling is the one trading task that separates the wannabe traders from the real deal traders. Truthfully, it will be one of the most difficult endeavors you will ever take on. This way of thinking leads to a failure of patience and discipline and causes some of the most notorious trading mistakes in the book:. The best thing you can do to stay patient and disciplined is to look at your career as a trader as a marathon and NOT a sprint.
This is a commitment to build skills that will allow you to profitably trade in any environment the market will throw at you at any time.
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