The Dimensions of a Successful Trading Entity

Many considerations go into creating and running a successful trading entity. We’ll look at the most popular which get the most attention, right through to the most important, which usually get the least attention.

Here is the list:

1. Entry signals
2. Risk management
3. Exit signals

4. Reliability
5. Reward to Risk
6. Opportunity
7. Capital management

8. Objectives
9. Familiarity with Markets
10. Resources
11. Mindset
12. Style
13. Management

Most, and by most I mean probably close to 80-90% look at number 1 and that is it! That is a startling reality, but a reality nonetheless. But there is a reason this happens. Most new traders are unaware that such a large number of traders ultimately fail in this business, and more importantly, this fact is well known by the very people who market trading in this way.

But enough of that, let’s look at some serious considerations you should make and the order in which you need to do it.

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I have spent an awful lot of my personal time putting together a 69 minute video for traders that I believe will open the door to understanding how to trade successfully.

This video is a trading system I call the 4 T’s trading system, and in this video you’ll learn the trading system itself, the rules and how to trade it. It will also show you I apply leverage to it, but more importantly how to use leverage with the trading system to achieve a goal or objective.

However it doesn’t end there. By the time you have watched this movie, I believe you will be able to take any trading system, not just the 4 T’s system and use it to achieve your goals. If you already have what you believe is a work-able system but are unable to make it work, this may answer your problems.

If you do have any questions after watching the video I urge you to send them to me, via the question form link which you’ll also find on my blog. I plan on answering any questions regularly so do send them along.

It is quite long, so make yourself a cuppa and enjoy
http://financialmarketfisherman.com

To your success
Dean Whittingham

Your Exit Strategy Should Be A Function Of You and Your Trading Needs

In my last post I spoke about getting back to the basics of trading when you find yourself struggling. I also mentioned that it was not the complete picture and that an exit strategy is more a function of the trader themselves. In this post I explain why.

There are many ways to formulate an exit strategy. Other than an initial stop loss, which is there to get you out of a bad trade, exit strategies are used to achieve a goal. A lot of traders don’t understand this concept and therefore pay little attention to it, spending more of their time worrying about entries.

Those that do consider the exit strategy important may still place more importance on finding the exit strategy that proves to be the most rewarding when back-testing. Although this is important it is only half the picture. An exit strategy also needs to support you the trader and help you achieve your goals.

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I am dedicated and have discipline, is that enough to succeed? Also I have problems with exits, it’s not fear or greed it’s just when to exit.

If we look at the first question, the name of the game is definitely discipline. When the Turtle experiment occurred several decades ago only some of the team chosen was able to satisfy the founder’s targets. The rest failed and it was a simple matter of discipline, nothing else.

As cliché as this sounds nowadays, I think we need to make sure we don’t see trading as the fun filled theme park it can sometimes appear to be. If you get the results you want from trading, then you can go spend that money at a fun filled theme park. Trading is just a means to get there and I have never found the act of trading itself exciting, I have always found it boring (as opposed to analyzing which I find quite exciting).

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How long can you hold on for?

100 traders were given a stock pick from a highly reputable trader/advisor. The pick came with entry price, stop loss and method of trail. [His accuracy in the past made him second to none, however very few of his clients can make the sort of returns he does, even though they follow his picks religiously.]

Of the 100 traders that entered the trade (all at roughly the same price), only 5 went on to make double digit returns, and only 1 went on to make a triple digit return. 50 broke even, 40 lost money and the remaining 14 had mixed results but all were less than double digit returns. So what happened?

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What are you going to do now?

This morning I woke up to the news that in the US the Dow had fallen 2.8% (387 points) overnight, along with falls in other markets. The ASX XJO, the Australian top 200 index has lost 3.7% today in a 229 point fall.

Having been a member of a private forum that focussed on put credit spreads, I know there are going to be many traders that will have found the last two weeks of trading particularly stressful.

The posts I dreaded reading from members of that forum time and time again after falls like this can be paraphrased in five words; “What should I do now?”

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What is the first rule of trading?

An effective money management strategy is an essential part of any trading system, and it can make the difference between one that lets you trade profitably, and one which erodes a traders capital until they can no longer trade at all.

In this post, we are going to explain why.

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Will controlling fear make us better traders?

In the previous posts in this series we have focussed on fear, as it is often cited as having the biggest impact on our trading psychology.

I would certainly tend to agree, but it is not the only emotion traders need to master.

In this post I’m going to talk about a couple of sins that traders also need to be aware of if they want to learn how to trade profitably.

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Know your enemy!

So far we’ve concentrated on looking at how fear and greed can affect a traders ability to follow their trading plan, and then we started deconstructing those fears piece by piece.

In this post you’ll find some more strategies for dealing with the fears that may be sabotaging your trading.

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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.

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