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Table of Contents:
Introduction -- P.1
The Trap -- P. 8
Step 1 - Get Real -- P. 24
Step 2 - Get Clear -- P. 29
Step 3 - Get Smart -- P. 49
Step 4 - Get Focused -- P. 63
Step 5 - Get Control -- P. 67
Step 6 - Get Organized -- P. 70
Step 7 - Get On With It! -- P. 86
About the Author -- P. 88
The Subtle Trap of Trading
Intention drives everything.
If you intend to make something happen, it will. If you don't have an intention, then you'll get whatever happens your way. And in the markets, the probabilities are that you'll lose your money unless you set the specific intention to become successful.
You've got a choice to make:
Are you going to make yourself into a winner or let yourself become a loser?
There's a statistic in the markets that's held true for many years. 90% of the people that come into the markets lose their money in the first six months.
The primary reason: the markets welcome everyone with open arms, everyone with any money, and you can start trading as soon as you can get your money into an account, whether you're truly ready or not.
The government has established agencies to regulate the institutions in the industry, but there's nothing protecting people from their own ignorance or lack of self-control. The markets are ruthless, literally. The markets don't play by rules and they'll do as they will, with no master to answer to. Any trader who shows up unprepared will have their money extracted sooner or later, and the markets just don't care.
There is no place where the phrase "A fool and his money are soon parted" is more applicable than in trading.
In trading, there are no pre-requisites like there are for driving a car, where you have to go through Driver's Ed and then take a test. On the road, ignorance or lack of minimum skill can hurt others. In the markets, however, the only person hurt by ignorance is the trader.
Just by the fact that you're here and have some money to trade with is an indicator that you're probably smarter than average. But just like any field of endeavor, if you're new to it, then you start off ignorant, unaware of the many details that make up that particular industry, and there are things you need to learn to establish yourself and be successful. When you opened your account, you were required to sign the disclosures that you understand there's risk in trading, but beyond that initial disclosure, there's no required learning or preparation.
There are many good brokers out there who will share their particular area of expertise with you and help you learn their methodology and systems.
Unfortunately, what is needed to be a consistent, long-term and profitable trader goes way beyond the being able to read a chart and enter trades according to a specific system. If you've felt the desire to enjoy the tremendous benefits of trading, but right along side that felt the anxiety of the risk, you're seeing the tip of the iceberg.
Are you sincere?
You're not alone, even though trading is a rather lonely activity. The statistic also says that 10% are making money. That's a lot of people. It's not lonely at the top. There are so many people that have consciously made the commitment to get there. Believe it or not, it's a good-sized group.
Let's look at some real numbers. As of January 31st, 2006, there were 1,451 introducing brokers holding memberships with the National Futures Association. Now the number of clients for each broker is something that they keep to themselves, as they should. But using a conservative estimate of 1,000 clients per IB, that gives us a total number of traders on that date of 1,451,000 traders. The losers total 1,305,900, and 145,100 people making money on a consistent basis.
Seems disproportionate, doesn't it. Well, it is. The good news in that is that there are over 100,000 traders who are now where you want to be. More good news for you: most of them took the long and difficult path to getting there. In your hands, you hold a No-BS, fast-start guide that will save you years and tens of thousands of dollars on your path getting there.
Do you sincerely want to be part of the 10% that make money year after year? Many people say they want it, but in reality aren't willing to put forth the sincere effort that it takes. Are you sincere?
I ask you for a reason. If you make the commitment to do what it takes to reach that 10% group, to reach that competence level and develop the skills that you need to, then you've taken the first step on the journey there.
If you don't make that commitment to yourself, then you're only kidding yourself with pipedreams and you might as well resign yourself to some large and painful losses in the markets. If you're not willing to do that for yourself, then you might be better off to take your money elsewhere. The markets will take it otherwise.
You're used to being one who excels. You're a trader because you're used to being above average, and getting above average results. You're smarter than average, enjoy a lifestyle well above the poverty line. You've got ambitions that exceed that of the average person.
You're used to being in the top 10%. Sincerely commit now that you'll be in the top ten in trading as well.
I've got some good news and bad news for you.
The good news is that in your hands you hold the short cut to making the dreams you started with a reality. The bad news is that this is still going to take some dedication and work on your part. That's not really bad news, though. If you're willing to do some work, then this course may save you tens of thousands of dollars that you had to earn in the first place.
If you're willing to do what's given to you in this course, then you'll find a sense of calming reassurance that you are capable of being successful as a trader, and you'll enjoy the lifestyle that you're hoping for.
The markets offer returns not found in most arenas of investing, and for those who properly prepare and keep their head on straight along the way, life is very good.
This is no different from life itself. You'll get out of it what you put into it.
Who this course is for, what it will cover, and what it won't cover.
In a nutshell, this course was created for those who are not enjoying their trading. Trading can be a wonderful, fun, exciting, profitable, educational activity that done right, can provide a nice living for you.
If the above doesn't match up with your experience, then you're in the right place.
Many people come into the markets, having heard numerous rags-to-riches (almost overnight) stories, how easy it can be, how some average Joe borrowed a $1,000 on his credit card and in 30 days parlayed it into $100,000 without breaking a sweat and only working at it 20 minutes a day. Good sales job selling the dream, better than the lottery and Publisher's Clearing House. Too bad they don't tell you about the emotional fire- breathing dragons that can turn you and your money into ashes.
While the fantasy sounds great, it is far from reality. You'd better come to the markets properly suited for battle, ready to take on the dragons of fear, doubt, anxiety, greed and others, or your chances of survival are slim.
The statistic of 90% of people coming to the markets, losing their money and leaving is a long-standing figure, and one that's there for a reason. The markets don't care about you and like it or not, you have absolute no control over the markets. They'll do as they please, whether it makes you rich or poor.
The 10% who are successful are largely comprised of people who started out just like you and I did: not knowing much about trading nor what it's like to deal with the incredibly strong emotions that come into play in trading.
Even some who've come, lost and left, return somewhat tempered and start off better the second time around, only to experience some success over weeks or months, then fall back into their earlier patterns that bring ruin.
For most of the truly long-term and successful traders, their achievement of their current position has come at the price of years of struggle and going through the cycles, plus all the money lost in the process. Many prominent figures in the trading world have said that it took them 15-20 years to become an established and consistently successful trader.
For you and me, that is not a pleasant prospect - struggling for years before we get to the dream that we had when we came here. There is a way to shorten the tunnel and bring that light considerably closer. This course is intended to be a most-direct route to that point.
In this course, we'll be talking about what you as a person, need to do to strive to become a successful trader so that you enjoy your trading, in all aspects. This is not for someone who thinks that I'm going to give you a 15- minute "how to" while you just sit there and do nothing, and then tomorrow morning you'll wake up and everything will be all roses.
This course will be enlightening, enjoyable, and some work. The exercises themselves are not that difficult, but they are challenging. I am going to challenge you and push you to challenge yourself. While some of the realizations may be uncomfortable, you're here to get results. The areas of change that you asked for by purchasing this course are changes in you. It is exactly in your skill sets, your perceptions, your understanding and your emotional control and clarity where we're going to make some changes, so that you see the results in your trading experience.
I'm here to share what I've learned from all my experiences and the studying I've done over the years, and how it will help you in your trading. I'll share with you, give you exercises to do, ask you questions and guide you along a process that will have you way better off than you are today. You have to decide right now, though, that you are going to do the exercises, that you'll be sincere in your effort and honest with yourself in answering the questions. If you can do that, you're halfway there just by making the decision to do so.
What this course will NOT cover.
I am NOT going to make any recommendations regarding which system you should use. There are dozens of different systems, indicators, and methods for trading. Which one you use is a personal choice that should be based on your emotional style (I'll help you figure that out) and what is the best fit for you. Every person is individual; you have your own personality and shouldchoose the one that feels right. I don't know of any "one-size-fits-all" trading program that is the right one for everybody on the planet.
I am NOT going to recommend that you choose any particular markets, software programs, computers, trades, or anything else that is part of what I consider the "hard-side" of trading, the technical side. I'll help you figure out which is best for you.
Trading is a personal matter. You are who you are and you should play the game on whichever field you like, with whatever tools and equipment you want. What you use should be based on what "fits" best for you. Those are your choices, your decisions.
Let me ask you a quick question. If I knew what the price of gold, the British pound, crude oil and soybeans were going to be 30 days from now, would you care if I shared that with you in a 1,000 page novel or if it were written down on a matchbook cover? No, of course not. You'd probably prefer the matchbook. It's the information you want, not reading time.
I've made this course concise and complete. You want to be successful. You want to be able to treat trading like a business and keep your head on straight while you're trading. You want valuable and useful information that you can get through in a short period of time.
The primary purpose of this course is to help you dramatically shorten the time curve to getting you where you want to be as a trader and save you painful losses and money. You're going to be fitted with your own suit of armor, so that you and your money are well protected on the battlefield of the markets.
Time is money. Let's get started.
While researching, I discovered a very subtle, almost hidden phenomenon that occurs that gave further insight to why hundreds of thousands of otherwise successful people with above average intelligence just can't seem to cut it as a trader. What I'm referring to is something that happens. It's not a character trait, and that's why I'm revealing it separately here.
I know several brokers who've been in the markets for years, and they all have dozens of stories of how they've had clients that were very astute individuals, and very successful outside of their trading. The clients seem to have all the right characteristics, but for some strange reason, they would do things in their trading that they wouldn't dream of in their business life.
The brokers keep scratching their heads and wondering why so many people seem to lose their minds.
The reason why, the "Oh my gosh, what has happened to this person?" has been so elusive and it is frustrating not only for the brokers, but for the traders as well. The traders are the ones losing their money with the almost irrational behavior.
The reason is what I call the Subtle Trap of Trading, and you'll find it in both the Futures and Forex markets.
As you read this, you may have the same thought that came to me, that it sounds like a conspiracy, although I don't really think it is. But the "system" sure does seem to work in the favor of a few at the expense of many.
Everything involved is very upfront, but when you take a deeper look at how everything works together, you'll come to understand what no one else does and why so many people wind up frustrated, confused and losing money in the markets.
I call it a trap for good reason. Most traders struggle and continue to lose money until their account is wiped out. Sometimes it even has them so trapped that it goes beyond their account into non-risk capital.
Here's how the whole thing starts.
Way back when, you heard about investing in stocks, the long term type investing, not day trading. You were cautioned to do research before investing your money and to learn the things that made for a good company to invest in. Perhaps you even joined an investment club, but most likely you at least had a mentor or parent that gave you some good sound advice.
You were also taught or figured it out on your own, that there's a lot to learn when investing in a company. The industry, market position, current management, their track record and competitive advantage, how to read the company's financial statements and annual reports, etc., etc. Lot's to learn.
Be safe and choose wisely, you're in it for the long term. Good advice.
Perhaps you did some long term investing, perhaps you did what many do and let your investing consist exclusively of mutual funds and your 401k. Much safer, simpler and easier to do, no doubt. Also well within the comfort zone for most.
Somewhere along the way, you heard about the wonderful world of the commodities markets. You hear how simple the whole concept is and the wonderful leverage that's involved. The first impression is usually "Wow!"
Now here's where the trap is set. Pay attention, this is very subtle, but incredibly potent in its effect.
The commodities aren't companies that require research to understand. They're goods that you grew up with. Gold, silver, wheat, soybeans, cattle, corn, sugar, natural gas, oil, etc. Loads of familiarity here. Now you learn how the futures contracts are made, about the ability to control contracts with only a marginal investment. Again, simple enough to understand.
So you decide to find a broker and open an account.
First thing is to go through all the disclosure documents where you acknowledge the risk involved, that you're only trading with money that you can actually afford to lose, that it isn't borrowed, and that it's money that is truly risk capital, money that if lost, won't affect your livelihood or your ability to provide for your family. The NFA is just looking out for you.
Next, you send in your money to fund your account. All this sounds familiar, right?
So here you are, money in hand with big dreams and high hopes. You've probably had your expectations of the possibilities raised considerably because now you've talked to your broker who shares their particular strategy or specialty and they've also sent you some charts to look at and some recommendations on markets that they're watching.
That's okay, that's their job and they're supposed to do that.
Side note: if you went straight to electronic trading, then you've had to educate yourself without broker assistance, and that often amplifies the effect of the trap. Read on.
You acknowledged the risk, you've digested as much information as you can in a short period of time and now you're ready to place your first trade.
First good opportunity comes along and now you actually get your feet wet. You're excited and you watch that trade, the markets, the news with great anticipation. You're learning more and more as you go, including the fact that there's a whole lot more to this trading business than you first thought.
A lot more.
But it's too late. You're hooked
Now, it doesn't really matter what happens on your very first trade. You see the potential and you know the money's there for the taking.
It doesn't take long and you get to experience some of the events that will inevitably occur to new traders:
During this time, you feel the torrent of emotions that come into play: anticipation, excitement, anxiety, greed (I remember my mouth actually watering the first time I saw my contracts doubling my "investment"!), fear, regret, anger, blame, elation, shame, so on and so on. The list is long, and the emotions are powerful, and they just pull you further into the trap.
It doesn't take too long and you've had several trades lose money. You're getting frustrated because things aren't working out like you'd come to expect. The chart patterns are getting confusing and the indicators you've been using have let you down. You're looking for other indicators, and the urge to deviate from your system or method is now getting very strong. You want to find a system or strategy that will give you the edge and allow youto beat the markets. You've got a competitive nature, and you know you're smart enough. You want to win!
At this point, unless you are a robot or have ice in your veins, the trap has been set and you have been caught.
Okay, I've laid out the normal series of events that occur for new traders. Sound at all familiar?
Did you see the trap? Here it is.
There are several things that are working in combination that make up the trap. I'll cover the components of the trap and show you how they work together to empty the accounts of hundreds of thousands of very astute and highly intelligent people every year.
Here are the components of the subtle (mental) trap of trading.
Now let's look at how these components turn very intelligent and successful people into traders that struggle, make un-wise decisions and lose inordinate amounts of money - willingly....
U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose. This training website is neither a solicitation nor an offer to Buy/Sell options, futures or securities. No representation is being made that any information you receive will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. Please use common sense. This site and all contents are for educational and research purposes only. Please get the advice of a competent financial advisor before investing your money in any financial instrument.
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