Which one are you?

Some traders will go through system after system, teacher after teacher, wasting thousands of dollars not only in useless systems but in lost trades before they realize they’ve been approaching the markets from the wrong standpoint because they’ve been trying to trade the wrong type of system.

The two types of traders are the mechanical type trader and the discretionary type trader. Therefore, there are two types of trading systems, a mechanical system and a discretionary system. The difference between the two is quite large not only in the way the market and possible trades are analyzed but in the psychological make-up of the trader themselves.

(more…)

Why Markets Correct

Markets move up because market participants believe in the fundamentals behind the market. At a certain point it is seen that the fundamentals change and the market corrects, however the reason fundamentals change is not because of some external event, but because of the participants themselves. In other words, an excess of bullishness creates bearishness; it is the participation itself in the market that creates the shift and thus the correction or bear market.

To understand this phenomenon, we must first look at how commodity cycles occur.

(more…)

1. Is there someone out there in the market trying to drive me broke? 2. Realistically, I think the question I would like to have answered is how the single largest volume trader of any instrument makes their bets on. TA or Fundamentals? I’d cry if it was Fundamentals since I’m a technician.

I here this question a lot; are the large players in the market fishing out the small guy, and maybe yes it does happen but this shouldn’t deter you or intimidate you either. The markets are still markets and that will never change. What one must remember is that if you enter a trade long and place a stop loss at a certain point you have done two things. You have told the market you feel this instrument is undervalued and will appreciate, and you have also told the market the price at which you are willing to sell your holding.

I feel this is where a lot of people get stop losses confused. If I purchase a house and then decide to sell it, I’m not placing a stop loss, but I am telling the market that at this price, I am willing to sell my house. A stop loss is no different. You are telling the market that at this price you are willing to sell and so if a buyer comes along who is willing to buy at the same price then so be it. All the broker is doing is fulfilling both of your wishes.

(more…)

Did you see it coming?

I would like to ask any reader if your intuition predicted either of the following; the sharp drop in the major indexes, the sharp rise in the US Dollar, or the sharp rise in the Japanese Yen (unwinding of carry trades)?

Intuition is our most powerful sense, it enables us to read someone’s energy frequency (good mood/bad mood), before they even walk through the door. It also gives us the ability to assess and analyze a situation at a sub-conscious level before other factors become involved.

(more…)

Where do your strengths lie?

Understanding where you are strong means having an edge. For example, one that stands out for me is a successful options trader. Before becoming a trader he was in the navy, and one of the things you can associate with defense forces is the strict discipline they must learn. You may or may not already know that discipline is an important key in trading success; and this man turned $10000 into 1 million in 3 years!

Unfortunately, many don’t find out what their strengths and weaknesses are until well after they have taken a solid beating from the markets. An example of this is getting involved in a trading system or buying a course where the meat of the trading is discretionary, meaning you analyze and make discretionary decisions based on your analysis. There is absolutely nothing wrong with this approach if it suits you, but for many it does not. Some people need a solid set of rules that require nothing more than if A = B, then do C, and this is called mechanical trading.

(more…)

If you hired a coach to help you build a trading business, and your coach asked you how much time a week could you devote to trading, what would your answer be?

Now is the heart breaker. Take your ROI% PA figure you are aiming for and write it down (if you haven’t read the previous post on determining if you need to trade, please click here and read it first). Now next to that, write down the number of hours you can allocate to trading. Now compare your results to the table below. Do they match up?

(more…)

Once the decision was made to found The Elite Insiders Group; BJ Dibbins, Dean Whittington and myself (Sean Rasmussen) got into action to put this blog together along with The Elite Insiders Group membership forum. The first question we posed was of course: What are we going to do that is unique to the rest of the market?

Well, that was a good question and we put our heads together.  It really didn’t take long at all to come up with the way we were going to help the average stock maket trading “beginner” to get established in their learning path to trading the market successfully. 
(more…)