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.

(more…)

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

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…)

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?”

(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…)

What are CFD’s?

I had planned on doing a post on CFD’s in the near future as part of a series on the many products available to traders, however I have moved this forward in response to a comment made on this blog asking to explain what CFD’s are. Brian did give a response but asked me to expand on it for the benefit of all.

The term CFD stands for Contract for Difference, and it is essentially a contract between you and another party (the provider), where by you settle the difference between the purchase price and sale price of the contract. If your sale price happens to be higher than your purchase price you make money, likewise, if your sale price is lower than your purchase price, you will lose money.

(more…)

What is it you want - part 2

Reading Dean’s last post the other day reminded me of a story I heard some time back that I think is very relevant to the topic of why we trade, and how we choose to trade.

Then not long afterwards I read Sean Rasmussen’s post in the bullhunters blog which reminded me of it yet again, so I’m going to share the story with you now.

(more…)

Really, what is it you want?

I received a disturbing email the other day from someone who was complaining about the number of stock market programmes he was receiving via email. His complaint was, ‘if they are so good, why aren’t the advisors all multi-millionaires and retired on the French Riviera?’

Let’s get something straight here; Trading is a business, like any other business. Bill Gates did not become a multi-millionaire overnight, nor did he achieve his incredible success all on his own without mentoring of some sort, and he especially didn’t do it from sitting on his back-side. Regardless of whether you’re a self-employed welder, mechanic, deli owner, real estate investor, or stock market trader, if you want to become a multi-millionaire and retire on the French Riviera you have to do more than just your trade; you have to build a business.

If you think that just because someone tells you in their sales page that he can show you how to make a five figure income per month trading, and all you have by way of capital is a few thousand dollars, and a couple of hours a month to devote to trading, then you are the fool!

I highly recommend a book called ‘The E-Myth Revisited’, by Michael Gerber; in this book he explains why over 80% of businesses fail. Briefly; to succeed in business, three elements of a business must succeed, and they are the technical side, the managerial side and the entrepreneurial side.

(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…)

What’s in a name?

Trading and investing can mean different things to different people, so let me share with you the way I define these terms.

I’m sure the dictionary and tax office will have alternative definitions, but to me it’s about the involvement of the trader in actually trading.

Let’s start by looking at decision making.

To me, a trader is someone who… (more…)