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7 ways someone can claim a 90% winning rate

  
  Education
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1. Mr. Hindsight

This person can point to any chart, and identify his buy and sell points with absolute precision. Usually recognized as an expert in his field of analysis, he can create stunning buy and sell signals for past data. Problem is, he usually can’t do it going forward. ADVICE: Ignore past “predictions,” and only follow Mr. Hindsight in real time. You’ll soon see his true ability.

2. Ms. Vague

Her market predictions are akin to reading the works of Nostradamus. She’ll say “the market will be up today, unless GDP figures are disappointing.” After the numbers come out, the prediction can be made to fit the outcome – “well, the numbers were only somewhat disappointing” or “other forces overpowered the market, so even though I was right, the market fell.” ADVICE: Turn off financial TV shows, since this is where Ms. Vague and here cohorts lurk.

3. Mr. Sneaky

This guy will have an ad that states “95% winning closed trades.” Sounds great, BUT it usually means that 5% of his trades are currently open losers, usually big losers, that he has held onto for a long time. ADVICE: Make sure all open trades are disclosed, too. Treat open and closed trades as the same. Don’t fall for the “this losing trade can always come back and be profitable” ploy.

4. Ms. Quick Exiter

In and out like a flash on winning trades, Ms. Quick Exiter will typically have losses 5-10 times her winners. But, she gets a lot of winners, and she wants to dazzle you with winning percentage. ADVICE: Look at total net profit. You probably will see a losing strategy, even with a 90%+ winning percentage.

5. Mr. Liar

If Mr. Liar can do anything to cheat, he will. In the past, he has stuck all his losing trades in one account, put all his winners in another account, and of course, only shows you the winning account. But, he has many other tricks up his sleeve, certainly more than I can name here. ADVICE: Track his trades in real time. Make sure they are specific and detailed enough so they cannot be misinterpreted.

6. Mr. Long Term

“The stock market will rise,” says Mr. Long Term. He is absolutely right, if you don’t pin him down on time. It may take 100 years, but stocks will eventually rise. But, the first 99 might wipe you out. Long term forecasters hope you’ll forget their predictions if they are incorrect. ADVICE: Treat any prediction, especially long term ones, with extreme suspicion. The fact is most experts are just guessing.

7. Ms. Really Can Do It

A rare and exceptional talent, this person is the real deal. No gimmicks, no tricks – just super high winning percentage and super high profits. ADVICE: Ask yourself “why would this person sell me their amazing secrets for $79, when if she is so good, she can trade and make unlimited amounts of money?” Answer: No one will ever sell you the ultimate key to trading success, and if they did, it would cost a lot more than you could afford.

So, now you know the seven members of the 90% winning trade club. Avoid these folks, and you’ll almost certainly become a better trader.

Hallmark of a Position Day Trader

  
  Education
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hallmark-trader

  • Routine and Predictable daily methodology
  • Psychological Control: Discipline, Focus, Patience
  • Macro vs Micro Market Analysis … seeing the Big Picture
  • Comprehensive intraday Hit List analysis
  • Multiple intraday Set-up opportunities
  • Various chart pattern recognition … low risk opportunities
  • Capital preservation = risking less than 50% maximum stop loss.
  • Expectation & Time Exits: Scalp, Breakeven, Profit Target, Let Profits Run
  • Trading Execution Commitment: honoring Set-up signals, not P&L

    • Cut Your Losers

      
      Education
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    A big debate among traders is whether to sell your losing stocks or hold onto them. Obviously, dependent on both the short and long-term outlook of a stock each side could have a winning argument.

    Whether there is a right or wrong answer, when solely using technical analysis for your stock picking analysis, YOU MUST ALWAYS SELL YOUR LOSERS.

    The great thing about technical analysis is that it takes emotion out of trading; however, emotion will always be there for other traders. That is why stocks can easily dip or jump higher in a single day – generally it is a reaction to a tangible action that just happened.

    When executing trades through the signals of technical analysis, there are always stop points or places where the trade is consider a failure . For the most part, that point of interest is determined by recent price action of a stock. Learn more about the art of stops.

    Technical analysis all about using the setup that gives the trader the highest probability of success. Once that setup is broken, your original probability is out the window. Get it?

    Basically once your stock dips below the “failure” point the criteria that you essentially bought the stock on no longer stands. Now you are just swinging into the wind hoping for the stock to come back.

    Instead I recommend you cut your losses and move on to the next trade. It’s all about keeping the odds in your favor.

    Could you Trade Full Time?

      
      Education
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    Take this quick quiz and honestly determine if you are built to trade full time:

    • Are you properly capitalized?
      I wouldn’t suggest anyone start to think about trading full time until they have at least six figures that can be used solely for trading. Living expenses must come from other income or saved funds. Without six figures (and the more then better), I suggest you continue to build your stake.
    • Are you a successful part time trader?
      Why do you think you can succeed being a full time trader if you haven’t made money as a part time trader? Have you built your own stake to six figures trading part time? If so, you pass this question with flying colors.
    • Have you developed a system that works?
      Does your system have a       positive expectancy? Have you back tested the system (I don’t hold too much weight to this question)? Do you understand position sizing and do you implement it properly so you don’t blow-up with one or two trades?
    • Does your system offer enough opportunity?
      Without opportunity (multiple trading signals per day/ week), you will not be able to achieve your system’s expectancy. A lack of opportunity may skew your results and turn your anticipated positive expectancy to a negative expectancy and cause you to go broke.
    • Can you handle your emotions?
      How do you handle your emotions now with longer term positions or part time trading? Do you follow your rules, all the time? Will you have pressure to make money every month, week or day? Can you handle being alone (most cases) and staring at a computer for large portions of the day?
    • Finally, do you have spouse or other influence that will interfere with your endeavor?
      A spouse, friend or family (member) can have a negative affect on your trading that may result in subconscious sabotage.       Outside negative forces or nagging pressure people may lead you down a path that is not controllable because you are trying to prove something rather than “just trade” based on your acquired skills. Make sure the closest people in your life support you while making the move to full time trading.

    Hallmark of a Position Day Trader

      
      Education
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  • Routine and Predictable daily methodology
  • Psychological Control: Discipline, Focus, Patience
  • Macro vs Micro Market Analysis … seeing the Big Picture
  • Comprehensive intraday Hit List analysis
  • Multiple intraday Set-up opportunities
  • Various chart pattern recognition … low risk opportunities
  • Capital preservation = risking less than 50% maximum stop loss.
  • Expectation & Time Exits: Scalp, Breakeven, Profit Target, Let Profits Run
  • Trading Execution Commitment: honoring Set-up signals, not P&L

    • Spotting the Best Trades

      
      Education
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    Let me begin by telling you of my system for isolating trades with odds 10 to 1 in my favor. Those are million dollar odds. Unfortunately, I still haven’t developed a method for calling all the big moves all the time. What I have done is develop a set of criteria that will, when they coincide, tell you the odds are heavily in favor of either an up or down move.

    This method seldom speaks, but when it does, you have as close to a sure thing as you’ll ever get. As you will see, this method will not call all the swings, but that’s not its purpose. Its function is to segregate the super trades from trades that are questionable.

    Trading in this manner is much easier because it allows you to take a longer term view of the market. I have found there is no need to monitor the market on a trade-by-trade basis, or, at times, even a daily basis. The signals are so strong that you don’t need to concern yourself with a microscopic view.

    I use two major tools for selecting “bankable trades”. They are: 1) premium relationships, and 2) open interest. When these two click, the odds are 75% in your favor. To further substantiate the 75% probability, I also check contrary opinion, the market’s reaction to news, trend direction, and a few chart formations.

    by Larry Williams, excerpt from his book, How I Made $1,000,000 Trading Commodities Last Year.

    Which type of trader?

      
      Education
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    Which type of trader?

    Traders

    Please which one of the following belong to you?

    there are many type of traders, an awareness of the varieties allows you to avoid the pitfalls.

    THE DISCIPLINED TRADER.

    This is the ideal type of trader, you take your profits and loses with ease, you focus on your system and follow it with discipline.Trading is usually a relax activity,you appreciate that a loss does not make you a looser.

    THE DOUBTER.

    you find it difficult to execute at signals, you doubt your won abilities.You need to develop confidence.Perhaps you should paper trade.

    BLAMER

    All losses are someones else ‘s fault, you blame bad fills, your broker for picking the phone up to slowly , our system for not being perfect, you need to regain your objectivity and self-responsibility.

    VICTIM

    You blame yourself, you feel the market is out to get you, you start becoming superstitious in your trading.

    OPTIMIST.

    You start thinking it’s only money , ill make it back later. you think all losses will bounce back to profits, or that you will start trading properly tomorrow.

    GAMBLER.

    You are in for the trill, Money is a side issue. Risk and reward analysis hardly figure in your trade, You want to be a player, want the buzz and excitement.

    TIMID.

    You enter a trade, but panic at the sight of a profit and take it far to soon, Fear rules your trading.

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