Many tradesmen will look to the markets,
as a means of continued support in their
retirement.
Developing your own plan to trade the
markets is like serving an apprenticeship
in your former career, it takes TIME and
DISCIPLINE to make a successful trader.
"Trading Plan ... wozzat" will help you
take the hurdles in your stride ... go to:
http://groups.yahoo.com/group/TradingPlan/
Life after racing fuel, Castrol R and customers:
You have been working in the automotive game for a
while and you have a few bucks to invest in the
stockmarket.
Eventually, to get away from the dirt and grease, you
think that you may even like to trade the markets as
a means of supporting yourself in retirement.
You know the caper, throw a few grand at a stock today
and pick up the profits tommorrow, then play golf for
the rest of the week. Great stuff, isn't it.
Whether you are an apprentice or you are looking at
retirement in a couple of years, if you have any
aspirations about trading the stockmarket in
retirement, you had better start your training NOW.
So what steps should you take to get started on your
long-term survival program?
No matter what your background has been, nothing can
prepare you for these markets properly - the only way
to learn it, is to do it ..... trade and trade some more.
Before trading, have a plan. Not important whether it
was developed by you or it came from a book, so long
as you have a plan.
Your plan should address, which market to trade,
risk/reward ratio, stop loss placement, entry and exit
levels and money management techniques.
To help you develop your own trading plan, you can get
some hints from my ebook "Trading Plan .... wozzat?"
Just download it from the link, above.
Expecting to "earn-while-you-learn" places unnecessary
stress on a trader, unless you have deep pockets from
the outset.
Looking from another angle, it probably took you
5 or 6 years to learn the basics of your first trade
in the automotive industry and learning to trade the
markets is no different for most traders. There have
been a lucky few that are born traders, but for the
most part, trading is a learned process and your
losses should be considered as paying your dues for
the tuition.
Tuition in these markets can cost thousands of dollars
in market losses and many hundreds of hours studytime.
Serving your "apprenticeship" means trading part-time,
building your plan and your confidence. Then, the money
and time that you have already invested is worth it,
when you finally start trading full-time.
Trading the markets for a living is the best job in
the world......
There's no dirt and grease, no noisy workshop and
no dirty coveralls.
You are the boss, but you must be self-disciplined.
Usually, there's no customers to give you any "aggro"
and no senior management feeling threatened by your
very presence.
It's a business with low overheads.....phone/fax, PC,
internet, data provider, charting program and a broker,
that's it!!
A reliable tax agent, an accountant and a solicitor
may be other professionals that you will need to
employ at times too.
Any other gismos and attachments are your choice, but
they are not really necessary to be a successful trader.
You can take days off and go on holidays as you please,
even take a break at the same time as your kids.
Some of your fellow traders turn out to be great people.
Dress is casual, even optional, on hot summer days...:)
Anybody with the discipline and determination can trade.
It just takes an ongoing committment to study the
markets' behaviour, as well as your own antics.
You don't need a university degree to trade the markets.
Let's face it, this trading caper isn't exactly rocket
science and some days it is very profitable ..... on other
days you will take a loss, but it should be a small one.
Once you are comfortable with your trading plan and its
execution, you just have to come to terms with a few
other personal issues. Like these:
DISCIPLINE, PATIENCE, STRESS, FEAR, GREED and any other
issues or emotions that you may encounter on a daily
basis in the trading arena.
Some traders lack confidence from the start and feel that
they may never build a tradeable plan for themselves.
To dispel such feelings, study the markets REGULARLY
and then try to master ONE trading issue, before moving
on to another subject.
It should be a slow and steady process for any learner
trader, starting from scratch with simple charting and
timing techniques and then graduating to more complex
analysis later.
Trying to put too much theory into practice simultaneously,
simply makes traders confused and undisciplined in their
approach towards trading the markets.
Likewise, too many indicators in your technical analysis
will only serve to confuse you, in the early stages.
You should try to develop your own approach to the markets
and the process of "knowing yourself", as a trader. More
about this self-knowledge later.
Trading these markets requires committment to study and
a realization that traders are not successful overnight
- just like learning your first trade. It probably took
you 4-5 years to learn how to be a competent mechanic,
a speccy spraypainter, or a gun panelbeater, etc.
So too, it takes time and effort to learn the BASICS of
trading successfully. Then, if you want to be a good
tradesman (trader) you must keep up with the latest
technology in your trade - again, this is an ongoing
committment to self-education.
Not everybody has a temperament suited to trading the
markets. Most traders are very emotional about their
trades, especially in their early experience - this may
well be the main reason for the high attrition rate
amongst new traders.
Overcoming, emotions can only be done by experience,
that means trading, trading and more trading........
Sorry, paper trading can only teach you about the
methodology of your trading system & the idiosyncracies
of the markets. To learn about yourself, you must trade
for real.
Paper-trade your trading plan for about ONE MONTH before
entering the markets with real money. This should be
ample time to expose any bugs in your trading system.
Some traders paper-trade for much longer periods, but
often this is just an excuse NOT TO TRADE. That may
seem strange to some, but some traders find it difficult
to "pull-the-trigger" to enter a trade, so they excuse
themselves by inventing "research" or paper-trading.
Overcome your trading fears.....just DO IT.!!
For most traders, the personal issues of overcoming the
emotions, triggered by fear and greed whilst trading,
are the greatest hurdles.
Some traders become very agitated whilst trading,
showing that they have little control over their
emotions. This lack of self-control leads to stress in
individual traders and it must be eliminated, in order
to trade in a disciplined and successful way.
Stress can be handled by using simple relaxation methods,
that employ exercises for both sides of the brain. Very
relaxing and helpful, if used BEFORE making important
trading decisions.
Our "self-knowledge" concerning our emotions, under
trading conditions, can help us to develop ways to
control our stress in trading hours.
A robot would make the best trader, if we could program
it with a winning mechanical method. This is because a
robot would be a disciplined trader, following the
trading plan to the letter, without emotions affecting
the trading decisions.
Technical Analysis...Keep it Simple Stupid
Most traders try to use too many indicators in their TA,
hence too many signals are generated.
KEEP IT SIMPLE... for example.
One momentum indicator, one overbought/oversold
indicator, trendlines, volume, price and TIME.
(TIME being even more important than price).
Enough indicators already!
Clean and SIMPLE... enough indicators to make a trading
decision...... that's all we need.
If you know WHEN to trade, then price simply becomes a
means to calculate profits or losses.
OK, now you have the technical tools you need, incorporate
them into your trading plan.
Use them in various markets and modify them, until you are
satisfied with your methodology.
Once you have a SIMPLE trading plan, that you feel
comfortable trading, use it and stick to your routine.
If you have something that works for you, don't change it.
"If it ain't broke, don't fix it."
Likewise, on the other side of the fence.....
A simple approach, fundamentally speaking, may also
help some traders to overcome the condition called
"information overload".
There are about six simple formulas for evaluating and
COMPARING the financials statements in company reports.
Unfortunately, they are not much use on companies that
do not make money, such as exploration companies or
other No Liability companies, etc.
So then, it's back to the charts. All the information
that we need to trade is in the charts anyway.
have a great day
paul yogi nipperess
Astrotrader and author.
Member: ISBA
http://easy-trading-tools.00cd.com
Excerpt
Chapter Two.
Are you trading markets or emotions?:
Tuition in these markets can cost
thousands of dollars in market losses and
many hours of study, but learning to
trade properly and profitably makes the
investment worth the efffort, in both
time and dollar terms.
Here's a different approach to the
markets and "knowing yourself".
Trading these markets requires
committment to study and a realization
that traders are not successful overnight
- just like learning your first trade.
Maybe it took you 4-5 years to learn as
an apprentice
(mechanic,carpenter,painter,etc),
so too it takes time (& effort) to learn
the BASICS of trading successfully. Then,
if you want to be a good tradesman
(trader) you must keep up with the latest
technology in your trade - again, this is
an ongoing committment to self-education.
Not everybody has a temperament suited to
trading the markets. Most traders are
very emotional about their trades,
especially in their early experience -
this may well be the main reason for the
high attrition rate amongst new traders.
Overcoming emotions can only be done by
experience, that means trading, trading,
trading........
Sorry, paper trading can only teach you
about the methodology of your trading
system and the idiosyncracies of the
markets - to learn about yourself, you
must trade for real.
Here's a discussion on HOPE and FEAR -
just two of the emotions to affect
traders daily.
Hope & Fear?
Posted by Noone on Sunday, 5 March 2000,
at 4:31 p.m.
We all hear that hope & fear control the
markets?
1. Can anyone explain one or both?
2. Can either one be seen on a chart?
3. Can either one be explained enough,
to be able to write an indicator etc.
to be shown on a chart, that will
help in trading?
4. If it can be seen, is it too late to
use, or would it be helpful to a
trader?
Anyone have any ideas or explanations
of Hope or Fear as far as trading?
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Posted by Yogi-in-Oz on 06 March, 2000
at 18:58:06:
Hi Noone,
Not sure where you are going with this,
but here goes:
1. HOPE is entering a market without a
trading plan.
HOPE is holding a position after it
has blown through your stop (if you
had one).
HOPE is holding that 3-day trade for
3 months or more.
HOPE is watching a market approaching
your PRICE STOP, long after your TIME
STOP has expired.
FEAR of loss is not pulling the
trigger, when your system posts an
entry signal.
FEAR of getting out too early is not
pulling the trigger, when your system
posts an exit signal.
FEAR of missing a trade is being in a
market before your entry signals have
been confirmed.
HOPE and FEAR are two of ten emotional
words that should never be part of a
trader's vocabulary. GREED, EGO,
"Coulda,woulda & shoulda" being
another five negative trading words.
2. HOPE & FEAR can always be seen
on the chart of any market - it's
called the PRICE.
3. To represent traders' emotions
(HOPE & FEAR being just two emotions)
in an indicator, then that indicator
would need to accurately reflect the
variations in such emotions. This
is measured by the Law of Vibration
and the Law of Resonance, both of
which are reflected in PRICE, so no
need to write a new indicator - just
use the one you have more effectively.
4. PRICE (a measure of traders' emotions)
can easily be seen and is never too
late to use, in a well-laid trading
plan, which is most helpful to all
traders.
Control your emotions (including HOPE
& FEAR) and become a better trader.
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