Demo trading? That's good. It's a great practice tool. But it has very little to do with live trading. Think about it. If you practice flying on a flight simulator, do you think your emotions will be the same when you you take control of a real plane? I can tell you first hand that a simulator does not prepare you for the real thing, Demo accounts make you familiar with the environment.Demo trading does not engage the real emotions that live trading does when you have your hard earned money at risk. I have met literally thousands of people who have admitted to me that they did not understand why they did really well with a demo account and lost all their money in a short period of time after they went live. Those traders are called "Demo Millionaires"
Thursday, April 28, 2011
Wednesday, April 27, 2011
Robots and Black Boxes
Do you really believe that robots and black boxes will fulfill your life's goals and dreams? If it were that simple, would there be thousands of different robots and black boxes out there? Does this mean they never work...No. Under the correct conditions they can work. However, even a broken clock is right twice a day. Stop fooling your self! If it were that easy, they could charge exorbitant amounts of money and we'd all wait on a line and put ourselves in debt to get our magic robot and black boxes. Your comments and opinions are welcome!
Tuesday, April 26, 2011
Should you be a trader?
First of all, you should not be thinking about trading unless you have money to invest in yourself and possibly lose. Trading is a business and like any other business, SCARED MONEY NEVER WINS! Like any other business, you have to SPEND MONEY TO MAKE MONEY!
Did you know that less than 10% of the people who get involved with trading actually make money? Did you ever stop to ask yourself why this is so? Here is what I know! First of all, the markets are set up for you to loose your money. Trading is a zero sum game, which means, one party has to lose their money while another party takes their money.
Trading is not a get rich quick scheme. Trading is hard work and for the average person takes time, money and commitment to learn this skill. Trading is a learnable skill. However, most of us are not wired at birth to be a successful trader and God bless those who are. If you are struggling as a trader, YOU ARE NOT WIRED FOR THIS!!.
This does not count you out, it just means, like most of us, you will have to do your due diligence. What does that mean? It means stop looking for the easy and cheap way out. You're only fooling yourself. By having this mindset, you are allowing yourself to fall for the scams. The scam artists play on your greed emotion. They know that you want to make the most money you can by putting in the least effort and commitment. You must invest time and money in yourself in order to achieve the success you desire.
Did you know that less than 10% of the people who get involved with trading actually make money? Did you ever stop to ask yourself why this is so? Here is what I know! First of all, the markets are set up for you to loose your money. Trading is a zero sum game, which means, one party has to lose their money while another party takes their money.
Trading is not a get rich quick scheme. Trading is hard work and for the average person takes time, money and commitment to learn this skill. Trading is a learnable skill. However, most of us are not wired at birth to be a successful trader and God bless those who are. If you are struggling as a trader, YOU ARE NOT WIRED FOR THIS!!.
This does not count you out, it just means, like most of us, you will have to do your due diligence. What does that mean? It means stop looking for the easy and cheap way out. You're only fooling yourself. By having this mindset, you are allowing yourself to fall for the scams. The scam artists play on your greed emotion. They know that you want to make the most money you can by putting in the least effort and commitment. You must invest time and money in yourself in order to achieve the success you desire.
Monday, April 25, 2011
Not Having Trading Capital at the moment is a Good Thing ????
So you want to trade and make money but you don't have the capital! That is a good thing! No I'm not crazy! I wish I had a nickel for every person I have met in my career that had the money to jump into the markets and regretted that they did just that. They all agreed, had they taken the time, made the effort and invested in a trading education before jumping into the markets they would still have their capital to trade with successfully.
In order to trade successfully, you must become a master at certain key areas of trading. Risk Management, Technical Analysis, Fundamental Analysis, Trading Psychology, Building a Trading Plan, Execution and other critical areas. If you have not mastered these key areas, you are putting your money at risk and should not be trading.
So here is why it is a good thing not to have trading capital at this time. It forces you to put things in the correct order. Getting a solid trading education is the first step, not the second step to starting a trading career. Just like someone who wants to be a doctor, you wouldn't start by seeing patients, make mistakes and then go backwards and get an education. Would that make any sense? Of course not!
If you start getting an education now, it might be a year or two before you are ready to begin trading real money. However, at that point you will be savvy enough to know how not to loose your money and not get wiped out before you have a chance to be successful.
As far as having money to start trading, this will give you time to start building capital, that is not bill money and allow you to have the piece of mind that you are using money that you can put at risk without hurting yourself or your family. You don't have to have thousands of dollars to get started. You can get started with much less and build your account with intelligent trades and good risk management.
I promise you this, if you jump into trading with out getting a solid education first, you will lose your money, have many sleepless nights and regret that you did not do this the right way. Get rid of your ego and stop fooling yourself to think you can do this completely on your own. You'll never get started unless you take the first baby step!
In order to trade successfully, you must become a master at certain key areas of trading. Risk Management, Technical Analysis, Fundamental Analysis, Trading Psychology, Building a Trading Plan, Execution and other critical areas. If you have not mastered these key areas, you are putting your money at risk and should not be trading.
So here is why it is a good thing not to have trading capital at this time. It forces you to put things in the correct order. Getting a solid trading education is the first step, not the second step to starting a trading career. Just like someone who wants to be a doctor, you wouldn't start by seeing patients, make mistakes and then go backwards and get an education. Would that make any sense? Of course not!
If you start getting an education now, it might be a year or two before you are ready to begin trading real money. However, at that point you will be savvy enough to know how not to loose your money and not get wiped out before you have a chance to be successful.
As far as having money to start trading, this will give you time to start building capital, that is not bill money and allow you to have the piece of mind that you are using money that you can put at risk without hurting yourself or your family. You don't have to have thousands of dollars to get started. You can get started with much less and build your account with intelligent trades and good risk management.
I promise you this, if you jump into trading with out getting a solid education first, you will lose your money, have many sleepless nights and regret that you did not do this the right way. Get rid of your ego and stop fooling yourself to think you can do this completely on your own. You'll never get started unless you take the first baby step!
Saturday, April 23, 2011
Gapping
In the Stock world, there is a dynamic known as Gapping. What most people do not know is that when the exchanges close at the end of each day, the institutions are still doing business.Gapping is what occurs when the price of a stock goes up or down at a time of day when you cannot get out of your position. A stock can gap up or down overnight so depending on whether you are long or short it can help you or hurt you. This is something that swing traders should be aware of.
Thursday, April 21, 2011
Shorting the Market
Shorting the market means that you are taking a position where you are anticipating the market to go down. This is a direct result of the fear emotion coming in to play. When you read a chart, and see the market going down you can profit from that move. Popular belief by people that are not in the know is that shorting is very risky. Nothing could be further from the truth.
What 2 Emotions Drive The Financial Markets?
The financial markets are driven by 2 emotions, Greed and Fear. If you know how to read a chart, you can clearly see greed and fear at work. When the market is going up that means greed is in play. When the market is going down you can see that fear is in play. This information helps a trader decide when to enter and when to exit a trade.
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