Do you know?

Visit forums, join memberships, purchase tuition with member areas for support, read books, talk to fellow traders etc and you can be guaranteed you will come across many who will be struggling with a whole host of reasons why. Some will even appear as experts but beneath the surface are struggling with some aspect of their own trading system or style. But do you know what the hardest thing any trader will have to do is?

1. Learn the jargon – no way, this is easy and it just takes time.

2. Find a profitable trading system – there are hundreds of thousands of them, in fact many are just given away for free nowadays.

3. Back test and paper trade – c’mon, I know many people don’t like hard work but you’re way off here.

4. Learning to read charts – kids like reading charts as they look at the green thing and they say, “Hey that’s going up”, or if they see a red thing they say “that’s going down”.

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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.

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and learn to sit on your hands; for example, how do I quit chasing a stock etc?

I remember someone asking me once, how on earth do you remain detached from your emotions when it is emotions that cause you to want to become a trader anyway? In actual fact it’s more like; emotions cause you to want to find financial freedom, but it means the same thing.

I agree, emotions do play a huge role and it’s even more pointless if you set out to achieve a financial goal in trading, so that you could enjoy a lifestyle goal, such as going on a cruise, only to not enjoy the cruise! All that work for nothing.

But let’s get serious.

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What you must do before buying any trading system

Now that our markets are going through some serious volatility, there are alarm bells ringing and expert’s opinions are being sought more than ever. But what you’ll also see more of now are the marketing of trading systems that work in both bull and bear markets; or how easy it is to ‘short’ a market.

Because of this I have written a 20 page report called ‘The Black Hole of Trading: what you must do before buying any trading system’. To put it mildly, I am disturbed by the number of traders that struggle, and I know this from being in the trenches with other traders who have committed money to a particular system (support forums etc), questions I get asked, and surveys and polls I have been conducting over the last 18 months.

But what disturbs me even more is that the reason traders struggle seems to elude not only the traders themselves, but also the very people who sell the trading systems. It’s simply just not enough to give someone a set of rules for entering and exiting a market based on a few indicators; if it was we’d all be raking in the bucks!

My 20 page report will explain to you why most struggle regardless of the system they are using; and what you can do about it. This isn’t some psychological emotional mumbo jumbo where I’m saying you must trade without emotions (I think this line has been overused); heck, the reason we get into trading is because of emotions. No…this is real meat that all traders and those seeking to trade must consider and apply first before buying any trading system.

The Black Hole of Trading

After reading my report please leave your comments below; I’d be very interested to hear your thoughts.

Happy Trading

Dean Whittingham
Pentagonal Trading © 2004 - 2007

What is the best?

I was asked this question a few weeks ago and would like to offer some pointers.

The question is coming from someone who is struggling to find the right strategy and finds charts very confusing.

The question is hard in that the answer to his or her question is a different answer to the one they are seeking. What I mean by this is that the best combination of technical analysis simply doesn’t exist.

Let’s take two traders.

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