One of the biggest mistakes we see with traders and investors is this:
They have no game-plan.
This is one of the most, if not the most important element in trading and you should not be trading without one.
When you have a game plan, it allows you to get in and out of the market in a non-emotional way.
So often we see traders jump into markets based on emotion, investment show ideas, or rumors. This is the worst possible way to trade and the quickest way to lose money.
It's not that often that we revisit previous posts but here is one that I wrote on October 23, 2008. It seems to me that seven months later not a lot has changed. I still think that we are going to see some difficult times ahead. But not all is doom and gloom, there are always opportunities to make money in the market.
Anyway I thought you would find this post interesting and hopefully educational.
Continue reading "It hasn't sunk in yet, and maybe it never will."
The new trader should have no difficulty following this presentation. Concepts progress logically from the basic to the more complex. There are no abstract theories that the trader must accept on faith or complex formulas to intimidate the new practitioner. Step by step, Curtis proves that any trader can duplicate his personal trading success by approaching trading as a business. A trader must have a consistent approach and a long-term perspective and must adhere to the four basic tenets of trading: trade with the trend, cut losses short, let profits run, and use good money management.
Curtis explains why most traders lose and why success depends upon long-term thinking. Curtis shows a simple way to define a trend and describes nine specific patterns that allow you to follow any trend with minimal risk. You will learn to recognize the most powerful pattern found on a chart and ways to avoid missing a major move.
Curtis teaches you how and when to move your stop to break-even and how to combine two powerful exit systems to ensure that you never again give back your open profits. Curtis also discusses some of the additional considerations that allow a trader to adopt a more aggressive stance when appropriate, including basis relationships, options expiration, and first notice days. Finally, Curtis teaches you a proven money management system using a fixed fractional approach to boost your performance and reduce your longest string of losses.
Curtis Arnold is a veteran of the stocks and commodities markets. His first book, Your Personal Computer Can Make You Rich in Stocks and Commodities, sold over 50,000 copies and contained the actual code for twenty-five programs that would create and plot technical indicators. His next book, Timing the Market (1984), sold nearly 70,000 copies worldwide. Changing Times magazine chose Timing the Market as the best investment book of the year in 1992. In 1994, the book made the best-seller list in India. Curtis developed the Commitment of Traders Index, a tool that allows traders to spot imbalances in futures open interest among small, large, and commercial speculators. In 1987, Curtis' research led him to quantify and classify classical chart patterns, then produce accurate statistics, rating each for its probabilities of success. This led Curtis to develop his PPS System (Pattern Probability Strategy), one of today's more successful and popular trading systems. After tripling his personal account in 1988, Curtis began training a limited number of students in his methodology. In 1992, one of his students became the number-one-ranked CTA in the country. That same year, a first-year PPS student won the United States Investing Championship with a return of 216.1 percent. Supertraders Almanac then chose PPS as "Trading Methodology of the Year."
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