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Announcements

This site is currently inactive as I have decided to move away from exclusively trading Forex in 2010 and as such will not be taking on new coaching clients in this area.

 



I have resumed my focus on coaching as a stock market mentor where I run a success guaranteed stock trading mentorship program

 



Additionally, you can now get access to what I consider to be the best stock options daily trade alert service.

 



Of course, I am biased and with a success rate fluctuating between 68.2% and 72.4% it is hard not to be biased.

 



If you do want to follow along with what I am doing every day you can get access to my daily stock market report 

 

 

You can read the step-by-step Bollinger Band Trading Strategy Guide - this is my main active trading strategy



Until next time


happy trading 


Mr Phil Newton or on LinkedIn Phil Newton trader

Failing to Plan??

Phil Newton's picture
taken from an article re : The Traders Edge............... Jack Schwager is the author of the popular books Market Wizards and The New Market Wizards. He has also produced a video titles 'What it Takes to be a Great Trader'. In this video, Jack concluded that there were ten characteristics that most, if not all, of his market wizards had in common. These characteristics were essentially as follows: Everyone Had a Method Discipline is the Key Desire and Drive Confidence Hard Work and Study Risk Control Patience Independence Losing is a Part of the Game A Love of Trading In this article, I will discuss the reasons why some traders fail to profit from trading, even when they own and understand a proven trading system. Failure to Use a Proven System The reasons why most traders who fail to profit from their trading, do so, is because they do not have a proven trading system. Consistently profitable trading systems can be purchased, or the budding trader can develop one for his or her self. This is not a good idea when you are a novice, as system design requires specialist knowledge, and a beginner would rarely have such knowledge. Failure to Fully Understand the System Possession of a proven trading system, especially if it is one that the trader has purchased, does not guarantee trading profits. It is vital that the trader back-test the system thoroughly, as this gives the trader a thorough understanding of the system's rules and their application. Such back testing also gives the trader a 'feel' for the profitability of the system, and it shows the trader that as long as he or she sticks to the system's rules, consistently profitable trading should be the outcome. I am very much against the use of so-called 'black box' trading systems, that is computer programs that do not disclose the systems' rules. Traders can never gain confidence in trading something that they do not understand - particularly if there is a risk that the spectacular results of the system are due to over optimization of the system's parameters. Three losing trades in a row, and traders usually discard such systems, even though many black-box systems remain profitable over the longer haul. I am also suspicious of some of the marketing for such systems, which usually boils down to "insert CD in drive 'D'; press 'Enter'; watch money flow into bucket placed under drive 'A'"! Failure to Follow the Rules This is the most common reason why system traders who fail, fail. Following rules seems easy, and it is indeed easy to do when one is paper trading. Real trading adds the ingredients of greed and fear, and it is these emotions that can over-ride a trader's determination to follow a system exactly. Most novice system traders who fail to follow their proven system have returns from their trading which are considerably worse than the system should have generated. Rising to the top few per cent of any profession requires an enormous amount of study and work. Trading is no exception. I commend to novice traders Jack Schwager's excellent books, and his video. Cultivate his ten characteristics, listed above, and success will be inevitable! I will conclude with a quotation from Tom Hopkins which is every bit as applicable to becoming a market master as it is to becoming one of his 'champions': The Champions Creed I am not judged by the number of times I fail, but by the number of times I succeed. And the number of times I succeed is in direct proportion to the number of times I can fail and keep trying! [Tom Hopkins]