 |
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 November 2006 Table of Contents (1) Quote on the Truth (2) Article - The Truth about Trading - Part 2 (3) Trading Plan Workshop (4) ATAA Presentation - Brisbane - 16 November 2006 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Stay up to date with all that is happening at Trading Plan, by subscribing to our 'Trading Blog' (no email address necessary). I am continually adding content and every update of this site is announced here, including minor content updates, page additions, and product releases. So stay plugged in by subscribing to this site's RSS feed. Copy and paste the address below into your RSS reader to receive the Trading Plan RSS feed... http://www.trading-plan.com/Trading-Plan.xml Not sure what RSS is? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Previous Issues Only just joined the mailing list? That's OK - you can read all of the previous issues of the Trading-Plan ezine. Visit http://www.trading-plan.com/ezines_previous.html to access the archive. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Online Trading Forum Do you want to learn from the experiences of others in a friendly online trading forum? I now frequent and contribute to the online trading forum called Stock Meeting Place. Membership is easy and free. You can come along and ask any trading question in one of the numerous sections of the forum and receive a helpful response from one of the many members (approximately 2000). This forum is the only place online where you will also find Daryl Guppy, the well known trader and author. Remember, there is no such thing as a silly question so visit, sign up and ask a question. Visit http://www.trading-plan.com/trading_forum.html for more information. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -- 1 -- Quote on the Truth "As scarce as truth is, the supply has always been in excess of the demand." Josh Billings (1818 - 1885) -- 2 -- The Truth about Trading - Part 2 Reality 1: You must have a detailed action plan The traders who make money know what they are doing and why they are doing it. They do not trade impulsively and they do not trade blindly. They have a plan and so should you. The problem is that planning is boring – get used to it. If you do not have a thorough plan then you may as well set fire to your money, the end result is the same. Reality 2: You have to learn about risk management Haphazard profits are for losers. Winners make regular, consistent gains and control their losses. Continual losses will eat up your trading capital and you will be out of the business. To avoid this you are going to have to understand the concept of risk and reward and apply this to every entry and exit you are involved in. Reality 3: There is no ‘holy grail’ of trading It would be great to believe that there was a nice easy way in to trading, a system we could buy that would give us constant winners. Take it from me, there is no such thing and you will waste a lot of money trying to find one. You are going to have to accept that there is no ‘holy grail’. There is no easy way to make consistent year on year gains as a trader no matter what you may be told. Reality 4: You must make the right choices As a new or inexperienced trader you are bombarded with information, special offers, rumours, advice and so on, all of it conflicting and confusing. To make regular profits as a trader you have to be able to choose the markets and methods that are right for your personal situation and not those that people are simply trying to sell you. Reality 5: You must face your worst enemy There is a serious barrier to your trading success, look in a mirror and you will see what this enemy looks like. Despite the best planning and a rigorous approach to risk management, what goes on in your head can unravel everything you try do as a trader. You cannot ignore this fact as this ignorance will lead to certain failure. Reality 6: You do not need extensive (and expensive) resources Most new and inexperienced traders I work with have already loaded themselves up with more hardware and software than they are ever likely to need. Not only does this add considerably to the set up costs and overhead of their trading business, it can cause considerable confusion and lead to some serious losses. Reality 7: You need to develop your own methodology There are hundreds if not thousands of indicators, opinions, systems and methods out there, all promising untold gains for their followers. In a lifetime of trading you could not hope to use all of these and nor should you try. Profitable trading does not need this level of complexity; you simply need to understand the basics then develop a methodology that suits you. Reality 8: You need to manage your trading business A trading business is like any other, it needs careful nurturing, management and control. You need to learn from your mistakes and develop preventative measures to avoid repeating these mistakes. You need to monitor your profit levels and ensure that the risk is still worth the reward. You have to continually refine your methods in line with changes in the market. So these are the realities of trading, firstly you must start with a detailed action plan, an action plan that you have developed for your situation. This action plan takes into account your trading capital and how much you need to take from the market on a weekly basis to justify what you are doing. Secondly, you need to become a risk manager, you just cannot enter trades without knowing the impact on your plan, and this means very clearly defined risk/reward parameters that simply cannot be exceeded. Your job will be to minimise the inevitable losses so that the less frequent winners will pay for them. You must also stop being taken in by the hype that is out there. This is not easy, when you are struggling to make it and someone appears to be offering you a lifeline then it is very tempting. You must avoid this temptation because this is a sole survival game; you are on your own and must make it on your own. There are a few excellent resources out there but most of them are rubbish. Anything that claims to tell you ‘secrets’ or give you an ‘inside track’ or to be revolutionary and different can usually be taken with a very large dose of salt. Ask yourself this; if these systems and methods were so good why is it that their owners are not living off the profits from actually trading them, I know I would be. Finally, if you must buy some of this stuff then ask for proof, make sure you know it works before parting with your money, you will not find many prepared to offer you this proof, if they can then the chances are you have found one of the good ones, if they can’t then start running. The next step is to must choose your markets wisely and be prepared to learn all you can about their behaviour. You must also learn to control what goes on in your head and the behaviour that results from these things. Ditch the pop psychology books and learn what you are doing well and badly by keeping a detailed journal and using it. And you must run this like a business not a part time gambling habit. Clear objectives, clear measurable goals, well defined methodologies and a passion for learning your new profession in years to come. Accept this and the markets will serve you well, fail to take the lessons on board and you will forever be the servant rather than the served. Steve Anderton, co-founder of Tactical Trader, is recognised as a highly profitable private trader who came from the ‘outside’ and made trading work for him. Trading for a living was a major career change for Steve. He spent several years researching the whole spectrum of activity before developing, testing and perfecting his own unique methodology. His website is www.tacticaltrader.com
-- 3 -- Trading Plan Workshop With anything in life, preparation is a key to success. Trading is no exception and time spent on developing your trading plan is time and effort well invested. "Give me six hours to chop down a tree and I will spend the first four sharpening the axe." The Trading Plan Workshop - an online course which leads you through the mindset, money and method to develop a trading plan - a must if you want trade profitably over the long term. "The questions so far tackled seem to be of paramount importance to a successful trading future. I am very happy with the material so far covered." In 'The New Market Wizards' by Jack Schwager, Howard Seidler said it best when he stated, "In regards to being successful in the markets, I think the single most important element is having a plan." This course goes for almost 3 months with over 40 messages sent every two days. You are able to send me your answers along the way for a personal review and comments. At $197 USD, this is most likely less than your next losing trade. I have been humbled by and appreciative of the comments I have received from people working through it, which include: "There is an absence of hype. In working through it there is a sense of integrity; one of its biggest appeals for me is that there are no outlandish claims. It takes a practical commonsense approach, carefully explaining every step along the way; providing sufficient links to provide greater detail and explanation on the major concepts and topics." "Indecision, fear, lack of confidence & so on; you have named them all & in your workshop plan have set forth means of rectifying them." "This workshop is not about any GRQ scheme - as far from it as you can get actually. What it does is teaches you the most important aspects that will allow you to survive and then thrive in the markets." Please visit http://www.trading-plan.com/trading_plan_workshop.html for more information. -- 4 -- ATAA Presentation - Brisbane - 16 November 2006 I will be presenting at the monthly Australian Technical Analysts Association meeting in Brisbane on 16 November 2006. The topic of my presentation will be 'Developing a Trading Plan', and further details are available at www.ataa.com.au This is available to members only, however non-members are invited to attend a monthly meeting before joining - with no obligation to join. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
