One of the Most Devilish Conundrums Faced by Traders

One of the most devilish conundrums faced by traders is what to do when an instrument they are following gives a valid signal but this signal is either at an all-time high or low. Such a situation has recently occurred with wheat, which according to my system gave a valid sell signal as it moved to a new low.

Another example of this is the GBPUSD daily chart for November 2015 to February 2016. It can be seen that within the stipulated period, the pair dropped 1500 pips, while rallies along the way offered short-selling opportunities. Now, when everything looked oversold at the end of February 2016, and you trading system gave you a valid “sell” signal, would you sell? Or would you simply go against the trend or buy?

The rues that govern trading often run counter to the rules that seem to govern the rest of society – in our daily lives we seem to have a built in barometer of what we think things are worth. This barometer is generally correct in our daily lives. For example, we know that if on Wednesday we walk into our local baker and the price of a loaf of bread has risen from $5.00 to $15.00 that we are being ripped off. Our value scale in this instance has worked. Similarly, if we walk into a car yard and see a car advertised for a fraction of its value we know that something strange is going on and all sorts of alarm bells go off.

Yet, in trading this inbuilt sense of the economics of life is useless. Granted, there are people who think they know what something is worth and they generate all manner of models and hyperbole to justify this judgment. They make the mistake of believing that the market is somehow listening to their internal narrative. These are the sort of people who are convinced that oil is worth $100 a barrel and that the market is just wrong. The only value in trading that is true and correct at all times is the value given to something by the market. You will often hear statements along the lines that the market is incorrect in its assessment of the value of something. As a basic principle the market can never be wrong – if we assume that the market is a synthesis of all opinions and knowledge then the price and trend it sets for an instrument is correct and anything else is simply tilting at windmills.

As a basic rule we have no idea how high or how low prices will go.

Author: Chris Tate


Article reproduced with kind permission of Tradinggame.com.au. For more helpful articles, trading products and services, and to pick up a free 5-part e-course, please visit: Tradinggame.com.au


NB: Tallinex.com wants you to make money from the markets.

Liz Cheval: A Legendary Female Turtle Trader

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 5

“Attach yourself to a trading mentor. The cost will be far less than trying to do it yourself. Swallow your pride and get help. If you cannot afford a mentor, then you have no business trading. Why? Because you are starting out undercapitalised. When you start trading you need, at the very least, daily guidance.” – Joe Ross

Name: Liz Cheval
Date of birth: November 1, 1956
Nationality: American
Occupation: Trader and funds manager

FROM TURTLE TO TITAN
Liz Cheval got a degree in math from Lawrence University in Appleton, Wisconsin, and after that, she worked as a clerk at the Chicago Board of Trade. At that time, there were few women in the world of trading.

Richard Dennis and William Eckhard argued about the possibility of training people and making them successful traders. He decided to train some people and give them his capital to trade. Richard made an attempt to test his idea, and so, he put out an advert, looking for those who would be interested in registering for a training program. Liz was among those who applied.

She was the only woman among those who applied. It turned out that the interview was simply the opportunity of a lifetime. She passed through an interview and began training with others. According to one source, she was able to earn the respect of her peers, and believed that working in a group of professional, competitive men helped prime her for professional challenges in the future.

After the training, the trainees (also called “turtles”) started their trading career. Liz founded and chaired EMC Capital in 1988, which was based in Illinois. The firm started with $1 million, and grew to have nearly $150 million in managed futures program.

Liz was a legendary market player as well as generous, and down-to-earth. She was kind to everyone. She once made annual profits of 107% for a period of 5 years; and she continued to perform well after that.

Liz died of aneurysm during a business trip to China. She was aged 56.

What You Need to Know:
1. It’s good for women to become traders. For women considering entering the financial industry, Liz revealed that she’d always encouraged them to manage money because she believed it to be a gender neutral occupation. No one can dispute women’s contribution based on gender investment management. Your performance is there in black and white profit and loss report. With so much trading done electronically now, money management is a good field for women.

2. Liz traded based on price action. There was no need to know what the government reports said, or what OPEC was doing or what other economic figures turned out to be. Whatever the fundamentals brought about would be seen live in the markets. She traded what she saw and she was profitable.

3. Liz was quoted as saying: “You need both a successful trading strategy and, more importantly, a reliable method to adapt the strategy to future market conditions. A successful trading strategy requires robust systems and sound risk management principles. The trading strategy is only as good as your research process. You have to identify robust estimators and develop a process to continually adapt the systems based on these reliable estimators…. You have to be disciplined in executing both trading and research strategies, in good periods and bad. A CTA has to be committed to their strategy whether it is in or out of favor.”

4. Liz believed that the markets, traders, money managers and investors, need to adapt. The ability to adapt to change is the key to long term success in trading. It’s relatively easy to develop a profitable trading strategy over a short time frame. It’s far more challenging to develop a reliable method to continually adapt the strategy to future market conditions.

Conclusion: There are things you need to overcome or give up before you can attain permanent success in the markets. Joe Ross, quote above, says traders have to give up themselves. They’ve to become different entirely, by overcoming pride, lack of patience, greed, selfishness, fear, intolerance, discontent, anxiety, and lust for money. They need to replace those things with self-discipline, self-control, humility, faith in themselves and what they’re doing, willingness to help others, being content with what the market gives them, joy in place of anxiety, and love of trading in place of lust for money (adapted from TRADERS’ magazine, October/November 2015).

This piece is ended with a quote from Liz:

“Go for it. Today the physical advantage of men [in the trading pits] is inconsequential because trading is virtually 100% electronic. I give the same advice to both men and women seeking entry level jobs in managed futures. Technical skills are mandatory. Great thinkers and idea creators need technical applications to test and execute trading strategies. Having those skills is a great way to gain entry or to build your own business.”

Copyright: Tallinex.com

Lessons from a Social Trading Program

“I realised that the best way to free myself from worries about uncertain outcomes, is to make sure a negative outcome of a specific trade will not affect me.” - Christiaan van der Meer

I recently came across a popular social trading program that enables signals providers to go through various career levels. This social trading program appeals to me because it doesn’t honor those who achieve most profits over the shortest period of the time without considering risk control methods and survivability of trading strategies used over a long period. The organizers of the social trading programs know what it takes to be a winning trader – unlike most competition organizers who flaunt lucky gamblers as market wizards.

There are 5 categories of traders in the program, namely: street traders, advanced traders, professional traders, risk-adjusted traders and institutional traders. Street trader is the lowest level and institutional trader is the highest levels and that is the level that most followers want to follow. You go through each level one after the other, and gradually.

Traders going through each level must not suffer more than 25% at each level.

1. A street trader must spend 30 days at that level and must make at least 0.5% profits before becoming an advanced trader.
2. An advanced trader must spend 90 days and must make at least 1.5% profits before becoming a professional trader.
3. A professional trader must spend 180 days and must make at least 3.0% profits before becoming a risk-adjusted trader.
4. A risk-adjusted trader must spend 360 days and must make at least 6.0% profits, before becoming an institutional trader, who must spend at least 365 days to get to that level.

Institutional traders are what people want to follow. Honestly, anyone who reaches the institutional trader level really has a proven strategy and safe risk control techniques. One sensible trader follows one institutional trader and he’s happy to have gained 2.1% in a recent month (not 20% or 200% per month that irrational people aspire to).

If trading contests and social trading programs were structured like this, all temporarily lucky suicide traders and gamblers would be prevented from reaching the top: the highest level. Can traders, brokerage firms, trading education websites, and other financial institutions learn anything from this?

A Baptism of Fire
When you buy or develop a new trading methodology, you’re in high spirits, thinking that you’ll soon be soaked in money and you’ll be rich enough to serve your landlord a quit notice. However, your newly-found speculation methodology will sooner or later go through a baptism of fire.

There are merits and demerits of wide stops, tight stops, wide targets and tight targets.

When a take profit level is tight, profits are taken quickly and the hit rate increases. But it’s the disadvantage of missing on larger movements for each trade, therefore making us to miss out on greater profits.

When a take profit level is wide, the hit rate is reduced but few trades that hit the target levels would recover numerous losses. Wide take profit levels are rarely hit in consolidating markets.

When a stop loss level is tight, we’re quickly taken out of the markets in case adverse movements occur and we keep our losses small as well. But it’s the disadvantage of too frequent stop-outs, plus too many small and accumulated losses can become something big with time. We’re also frequently, prematurely stopped out of trades that could end up being profitable.

When a stop loss is wide, we give our open positions enough leeway so that in some cases, we aren’t prematurely stopped out of positions that could end up being winners. This has the potential of increasing our hit rate, but there is a disadvantage of being stopped out eventually, which makes the loss per stop loss trigger a considerable thing because of its width.

If you don’t use stop loss, then you’re a suicide trader and a gambler. This means your risk is unlimited. You may look smart in most cases and for a long time, provided that market are choppy and consolidating, but rare adverse movements will soon occur and your account will go kaput.

If you don’t use take profit levels, then you need patience and discipline to catch rare trending markets which would recover all your past losses and move you ahead. This means your reward is potentially unlimited, though you’re better off using take profit levels.

To sum it up, someone called “loyek590” on Elitetrader.com wrote: “I've traded the chop and I've traded the trend. The chop is nice because you make money every day. Until that one day that wipes out the whole months profits. Now I trade the trend and lose money almost everyday, until I catch that one rare trend and hopefully it wipes out all those small losses.

This is really a baptism of fire which all traders will face. If your trading methodology can come out victoriously in spite of the advantages and disadvantages mentioned above, then you’ve found a pearl of inestimable value.

Conclusion: [/b]There are no perfect trading methods or perfect risk control methods. We simply need to find optimal parameters for our strategies and adapt to the ongoing market conditions. I’m so grateful and happy now that I allow my stops to always protect my capital. I know a trader who’s never had a negative year in his career – this is possible for all us to attain.

This piece is ended by the quote below:
[b]
“Accept drawdowns as part of this business and learn how to deal with them. When you think about increasing your position-size, be aware that more profits usually mean more risk. Get to know your drawdowns and backtest to get an idea of what to expect so that you’re not surprised when it happens.” - Marco Mayer



Source: www.tallinex.com


What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html

Salem Abraham: Nearly Three Decades of Good Performances

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 6[b]

“We do not have a crystal ball, so we do not know when this current losing period will end. However, we can look in the rear view mirror and see that when we experienced periods like this before, not only did we survive, but we thrived.” [/b]– Salem Abraham

Name: Salem Abraham
Date of birth: 1966
Nationality: American
Occupation: Investor and fund manager
Website: Abrahamtrading.com

HE KNEW HE WAS GOING TO BE SUCCESSFUL
Born in Canadian, Hemphill County, Texas, Salem finished studying at Canadian High School, and the Roman Catholic-affiliated University of Notre Dame in South Bend, Indiana. While in College, he developed an interest in the markets, inspired by Jerry Parker, who was also a fund manager.

In January 1988, he started Abraham Trading Company (ATC), with an initial capital of $100,000. The company trades different types of financial markets, including real estate, commodities, stocks, currencies, and interest rates. Owing to good performances in the first years, the company was able to lure more investors. Right now the assets under their management are $302 million.

A friend of Salem said Salem knew he was going to be successful. His assumption has been proven correct. Salem is married to Ruth Ann Dennis, and they’re blessed with 8 kids.

What You Need to Know:
1. Since ATC was founded in 1988, it’s had 7 losing years and 21 winning years. The biggest loss per annum was -10.95% (2005), and the smallest loss per annum was – 0.42% (1996). The biggest profit per annum was 142.04% (1988), and the smallest profit per annum was 0.43% (2013). The targeted annual profit rate was 15% - 20%. Since the company was formed till the end of the year 2008, the average profits were 21.8% per annum. This is a lesson for many of you who’ve irrational and unrealistic expectations from the markets. Please read this paragraph again and see the quote at the end of this article. What can you infer?

2. What is ATC’s trading methodology? On their website it’s stated that, the ATC trading methodology is a systematic approach blending long-term trend following, short-term trend following, short-term momentum and mean reversion strategies. Each strategy is further divided into sub-systems to facilitate smoother entries and exits. They’ve also implemented filtering techniques in some strategies to avoid trades with adverse risk/reward characteristics. While the filter's goal is to capture profits, its selectiveness allows the system to enter markets only during periods when the risk/reward of a trade is heavily in the trade's favor. It’s even possible that if unacceptable risk characteristics exist, the filter could avoid trades with positive profit expectations. The end result is a trading method that has historically provided their investors exceptional returns with low correlation to stock and bond investments.

3. In order to create a winning speculation methodology, you need experience. According to the ATC website, the most common and most dangerous error made in system development is curve fitting. One thing that has been learned over the last 25 years of trading is that curve fitting cannot be understood by theory alone. There are many statistical traps that can only be learned by trading systems real-time. Statistics require many assumptions. It’s extremely difficult to know which of these assumptions are valid in the real world until they are actually put into practice in the real world. This is really an important statement.

4. There are popular trading ideas, theories and strategies that fail when put to tests. These ideas, strategies, theories are, ridiculously, accepted by economists, statisticians and analysts.

5. We want to be sure we’ve an edge. This edge is attained by following the dominant biases, but it doesn’t mean you’ll make money every month (or even every year). It’s still futile to look for magical indicators or chart patterns or price action or trading methodology that works with insane accuracy. Those who manage millions or billions of dollars don’t make money every month (or even every year); yet they’re successful overall.

Conclusion: In one of his past newsletters, Salem revealed how casinos make money. For example, when a roulette wheel is spun, a casino has no way of telling what the outcome will be. Casinos, like trend followers, are not able to predict the future. But, casinos know that if a roulette wheel is spun enough times, they will come out ahead, and this is because the odds are in their favor. On a practical level, one very simple way to put the odds in your favor in the stock market is, again, to trade with trend. A very basic rule of thumb that’s followed in this regard is this: Buy stocks making new highs in bull markets. Short sell stocks that are making new lows in bear markets. There is more to trend following than this, but even if you follow this very simple rule, I think it’ll give you a small edge. If a small edge is repeated over time

I’d like to conclude this article with the quote below. It’s really a food for thought:

“I have noted over the years that it is the lack of realism that brings traders undone. The traditional approach I have seen with traders is that they read a book on the weekend start trading on Monday, expect to buy a Porsche on Wednesday and move to Provence on Friday. When this doesn’t happen they throw their toys out of the pram and give up. Much like they have done with everything else, which is why they are in the position, they are. Trading is a grind, it is not as portrayed either in the news or in other forms of media. You do the same thing in the same way everyday – that is simply the way it is and most cannot cope with this. The reality of time and effort defeats their dream simply because it takes time and effort.” – Chris Tate (Source: Tradinggame.com.au)

Source: www.tallinex.com


What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html

The Markets Aren’t to Blame

“In tutoring others, I realized that most of the people attempting to trade had no idea what the markets were about, and no idea of what they were doing.” – Joe Ross

Helping People Is Almost Impossible
Many people disturb trading pros, begging for help in their trading. They want to learn good trading approaches or principles, which can turn things around for them. You’ll feel their plausible sincerity when they desperate call pros for help. But when the pros offer to help them, giving them useful tips and strategies, you’ll discover that they don’t follow the pros advice.

A Latin American guy was disturbing a pro for a long time (who happened to be his acquaintance), asking for assistance. Later the pro arranged how they’d meet and showed him everything as he himself was doing it, including MM recommendations. To his surprise, the pro later found out that the way the guy traded afterwards was quite contrary to the advice he was given. It was a pure suicide trading. Needless to say, the guy crashed his account and quit trading finally.

In an African country, a newbie travelled to take instruction on how to use a pro’s strategy after hearing that the pro was making money with the strategy. The pro was kind enough to explain everything to him free, but he advised him to first try it on demo to see whether the strategy fit his psychology. On the contrary, the newbie applied the strategy to his live account directly.

In one Asian country, a certain young man who’d been struggling with the market for years later came across a winning trader who offered to help him for free. The winning trader showed him the strategy he was using, plus how to control risk with it. A few weeks later, the winning trader found out that the young man was using too high lot sizes and no stops; contrary to the advice he was given. The winning trader called him on phone, warning him against his dangerous trading style, but the young man refused to change. He’d been lucky so far… Nonetheless, he’d soon be found out in crazy market conditions.

A European bought a positive expectancy strategy but failed to use it as recommended. Someone from North America paid a huge amount to a trading coach, but later he did things that were contrary to what the coach taught him.

In Oceania, a lady was coached via the Internet, but later she simply traded in a manner that was quite contrary to how she was coached.

When people know they’ll still do what they’ll do, why do they seek help in the first place? The answer is simple. Majority of struggling traders are difficult to help.

So let people trade according to their beliefs and psychology and face the positive (or negative) results of their actions, taking responsibility for that. But the truth remains that the market can’t be blamed. Blaming the market is like running after the wind, for it’ll do what it’ll do. The market behaves according to its nature without having you in mind.

In spite of this, you can still achieve success in the markets if you really want it.

Why People Discourage Others from Trading
When people tell you that you can’t do something, what they’re really telling you is that they think you can’t do it because they can’t do it. People aren’t going to do something, and they’d like to tell you the reasons you shouldn’t do it either.

If I was hopeless at math, does that mean others can’t master it? If someone fails at programming, does it mean others can’t do it? If you failed at any challenging endeavor, does that mean others will fail if they try the same thing?

I remember a tale from “Baro-san” (of Elitetrader):

Driven by hunger, a fox tried to reach some grapes hanging high on the vine but was unable to, although he leaped with all his strength. As he went away, the fox remarked 'Oh, you aren't even ripe yet! I don't need any sour grapes.' People who speak disparagingly of things that they cannot attain would do well to apply this story to themselves.

Those who lose with fundamental analysis say it’s worthless. Those who fail with technical analysis declare it sucks. They can’t do it, and they think nobody can do it. Since I can’t pass an exam so that exam is useless. I find multilevel marketing difficult, and so, it’s impossible to excel at it. I can’t make money from Forex – therefore Forex doesn’t work.

When people fail at something, they develop hatred for it. They look at their screen and say, “this game is a waste of time.” They can’t stand playing games for profits in an uncertain world; and as a result, they can’t put in the necessary effort, doggedness and resources into achieving trading mastery. This is one of the reasons why trading can’t work for so many people.

Stop Blaming the Markets
The world is rife with people who often blame others for their woes (though some have genuine reasons for doing this). The same thing happens in trading; too many traders blame the markets for adverse circumstances they face, rather than accepting responsibility for their poor results.

When a novice makes money in the early days of their trading career, they childishly think the markets are easy to conquer. It’s the nature of the market to trend up, trend down and consolidate, doing this slowly or fast and furiously. It’s the nature of the market to be choppy, to zigzag or to experience fakeouts. It’s the nature of the market to pretend as though it’s going up or down or consolidating – only to do the opposite. That’s the nature of the market in the past and that’s how it’ll be forever.

The markets aren’t to blame. Despite these acts of the markets, many traders have devised ways to pull consistence profits on monthly, quarterly or annual basis. Those who blame the market for their woes would hardly make any progress, but those who take responsibility for whatever happens to them would see themselves as the only solution to their trading problems and take steps to solve the problem.

The true test of someone's character isn't how they handle success. It's how they cope with setbacks. When a trade goes against a good trader, she/he shrugs it off and moves to the next trade. Also, when a trade moves in favor of a good trader she/he shrugs it off and moves to the next trade.

This piece is ended with the quote below:

“In the end, you simply have to learn one thing: You cannot force the market, you can only take what it offers.” Todd Gordon

Source: www.tallinex.com

Meet the Best Traders in the World

“Although I’ve witnessed uncountable demo contests the world over, these are the most impressive results I’ve ever seen, despite the vagaries of the markets.” – Analyst75

Honestly, my plan for this week was to post an article about Alan Howard, a self-made billionaire trader, in our Master Traders series. Nonetheless, I’d to change my mind and post what you’re reading today, as a result of outstanding results of a just concluded demo contest.

I don’t like to sound like promoting anyone or any firm, but doubting Thomases need to see this. Perhaps they’d admit that trading success is attainable.

A Trading Firm Announces a Demo Contest
In early March 2016, I unexpectedly came across this announcement:

“Get ready to take part in something new... something different! The starting clock is counting down to the first “(company name withheld)” trading competition of 2016... and the prizes are huge!

This is a demo-trading contest because we wanted anyone and everyone to take part... we just decided to make things more interesting by offering bigger prizes than most live-trading competitions. So... if you have ever thought of taking part in a trading competition, then this is the competition to take part in!

Competition entrants will go head-to-head - each trading a $2,500 micro account with 1:400 leverage. There are no restrictions - competitors are free to trade any strategy... whether manual, automated, or both.

Come early, or come late - you will be able to dive in and join the fun right up until April 15th.”

The competition started in March 13, 2016 and ended on the day mentioned in the preceding paragraph. There are no trading/withdrawal restrictions on prize monies.

When a Broker Doesn’t Impose Restrictions
Let’s be frank here, the kind of broker you use really matters in your trading success. It’s one of the big factors in your profitability as a trader. I hate FIFO rules. I hate restrictions on strategies, like hedging, automation, etc.

I like a broker that doesn’t interfere with trading strategies and styles, no matter what they’re. I like brokers that don’t trade against me or manipulate my traders. I like brokers that don’t impose restrictions on me. Let me use any trading styles I like and be responsible for the outcome. Professional traders thrive when they’re uninhibited by unfair restrictions. I saw the most impressive results in my life because a trading firm doesn’t impose any restrictions on traders/competitors.

As far as the trading firm which organized the contest is concerned, their demo accounts are almost similar to live accounts. You receive transactions alerts into your inbox as if you were using live accounts.

The Number One Contestant – A Mad Trader
The contest started, and at the end of the first week, the number one guy had turned 2,500 USD to $63,000 USD. By Thursday of the second week of the contest duration, his equity stood at 106,000 USD. On the following day (Friday), his equity reached 109,000 USD; but he suffered a drawdown that day. His equity dropped to 73,000 USD.

I told my boss in the office: “This guy is an exceptionally good trader. Even if the contest ends now, he’s already made an impressive result by turning 2,500 USD to 73,000 USD just in two weeks.”

My boss nodded in agreement.

In the third week of the contest, the top guy raised his equity from 73,000 USD to 79,000 USD. At the end of the third week, the equity stood at 136,000 USD. In the last week, he raised the equity to 666,000 USD.

On April 14, in the afternoon, I showed the result to my boss. The guy’s equity was already 695,000 USD. Three hours later, I was visiting a friend of mine when I checked the contest results, the guy’s equity was then 1,080,000 USD!

I called my boss on phone to inform him. He was too surprised. Early on Friday – the day the contest was to finish – the guy’s equity had been turned to 1,350,000 USD. At the end of the contest, his closed balance was 1,433,480 USD.

Here is more info about the guy’s results:

Contestant name: A.D.
Position: 1st
Opening balance: 2,500 USD
Volume traded: 34,230.80 lots
Number of trades: 316 trades
Final balance 1,433,480 USD
Gains: 57,239.20%
Contest duration: 4 weeks
Prize money: 5,000 USD

The contestant who came second turned 2,500 USD into 741,365 (29,554.60%). The contestant who came third turned 2,500 USD into 713,076 (28,423.04%). All within 4 weeks. I’ll not mention clean results of many other traders in that contest.

Is This Realistic?
Another popular broker in Europe just finished their demo contest on April 15, 2016; the duration was like that of demo contest detailed here and the person taking the highest position made only 331.78% profits in 4 weeks (though nearly 2500 people registered for the contest).

I can tell you that 331.78% in 4 weeks is an impressive return. But who can argue with 57,239.20% in 4 weeks? It means you could’ve gained at least 57,200 USD in 4 weeks if you invested only 100 USD and got that kind of results in terms of percentage!

Is this realistic? Yes and No.

Yes, because the results are true, and because the trading firm involved allows trading conditions on virtual accounts to be exactly similar to those of live accounts.

No, because contestants used excessive leveraging, which might be too pernicious when trading on real accounts. But I also believe that they would’ve made impressively decent profits even when they risked 1% per trade, using risk control features, and compounding their accounts for one year.

As a professional trader myself, I personally witnessed the vagaries of the markets during the whole contest duration. I witnessed fake-outs, strong trending movements, short-squeezes, false breakouts, reversals, traps, equilibrium phases, random volatility etc. Regardless of these random and unpredictable behavior of the markets, those awesome traders made astounding profits.

Who Is That Mad Genius?
As I said earlier, I’m not advertising anything here. I don’t know the mad genius in person, but I’m a witness to his gargantuan results. I just wanted readers to know that there are talented traders on this planet. I suspect those traders used automated or semi-automated strategies.

The firm that organized the contest might try to interview the top trader or the top three or the top five. I don’t know whether this would be done, but I can guarantee you that if the top trader (that mad guy) is interviewed, the interview would be included in one of my future articles; the Master Traders series.

Conclusion: There are many, many traders who can speculate successfully. If you’re one of those doubting Thomases who think success is impossible in the markets, this article was written to prove you wrong. Can you now see that, while there are losing traders, there are also hugely successful traders? Do you want to be like them? You can be like them if you really want to!

To be candid, I’d no intention of using any link to prove my point, owing to the fact that I don’t want to appear like promoting anything. On the other side, if I don’t show any links, readers who easily come in and say: “You know that blogger/forumer is a smart liar.” I don’t want to claim something that got no proof. It’s sad that many readers wouldn’t believe me if I didn’t make any reference. Nevertheless, if you were curious enough, you might want to see the proof here: www.tallinex.com/leaderboard

As from next week, I’ll resume posting my usual articles. This article is ended with the quote below:

“People lose money for various reasons, mostly they are not ready to compete against the best, it is like a five year old playing basketball against a seven footer, people think it is a even playing field, it is not, MOST are BAIT and the few are WHALES, Whale doesn't have to attack any of the bait, whale just opens his mouth and swims. Some of the brightest people come to the markets thinking their brain will overcome experience, I certainly can't bend microwaves, but I know the probabilities of swing distance of ES in first hour of ES. And there are differences when it comes to bending microwaves, YOU are working for someone and I work for myself.” – Handle123 (Source: Elitetrader.com)


Source: www.tallinex.com

Toni Hansen: An Indispensable Sage of the Markets

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 7

“Of all of the lies my traders tell themselves, the one that shows up the most frequently is “I don’t think I can do this.” – Louise Bedford

Name: Toni Hansen
Nationality: American
Occupation: Full-time trader and mentor
Website: Tonihansen.com

ADRRESING THE TOUGHEST TRADING QUESTIONS
A respected technical analyst and full-time trader with decent profits from weak and strong markets, Toni started her career as an equity swing trader, after which she mastered other types of financial markets. She has crafted ways to tackle stocks, futures, options, ETFs and Forex, surviving uptrend, downtrend and equilibrium phases in the markets.

She’s spoken at many trade shows and expos. She’s contributed to Real Money Pro, CME Group, Active Trader, Money Show, Trading View, etc.

Toni has always traded and coached many professionals in various fields of financial industry, including other people outside the financial industry. She quotes other great traders in her writings.

Please check her website. Tonihansen.com is rich with very helpful trading articles, insights, lessons and courses, which can help beginner, professional and advanced traders. For example, you can get a one-stop shop for in-depth lessons on introduction to technical analysis, candlestick charting, trends, indicators, fear and greed, money management, advanced courses on trends, various ways of determining resistance and support, Fibonacci levels, market reversals, selecting your trading style, and so on.

Giving answers that work, Toni has also made bold attempts to address the toughest questions in trading, such as:

Which type of market analysis will I employ?
Which markets should I focus on?
Which strategies should I use for trading?
Which time frame should be my primary focus? Etc.

What You Need to Know:
In order to have a taste of insightful tips and lessons Toni has to offer traders, please read the article below. The article was taken from her website and the link is located at: Tonihansen.com/trading-lessons.html#traits

8 Traits of a Successful Trader
The market is an ever-changing entity, each day presenting us with different and unique scenarios with no two days every the same. Nevertheless, the market is more or less a reflection of people's ideas and attitudes and while it is also true that no two people are alike, each and every one of us has something in common with someone else, whether it’s the way we get out of bed in the morning or the foods we prefer to eat. Additionally, we tend to repeat actions, such as preferring to brush our teeth at a certain time of day or making sure we try to catch the Thursday night prime time television shows. No matter which angle you look at it from, humans are creatures of habit and this tendency gets reflected in a security’s price movement. It's what makes technical analysis a reliable and profitable method for analyzing the market.

Unfortunately, technical analysis is not always cut and dry. The same core pattern does not work the same way in every market environment. For instance, one of the setups I often look for on a daily chart is a 3-5 day pullback in an uptrending stock for buying opportunities. Where newer traders tend to get in trouble, however, is taking such a setup to mean that every time an uptrending stock pulls back 3-5 days and then breaks the previous day's highs that it means they should buy it. In reality, there are always exceptions and its learning what these are that can be the dividing line between those traders who are successful and those who fail. In this example, how a security pulls back in a primary uptrend, as well as overall market conditions, will greatly influence whether taking such a pullback as a long is really worth the risk to reward. In some cases it is not.

The ability to adjust to changing market circumstances is just one of the traits of a successful trader. In truth though, there are quite a few. Over the years I’ve mentored quite a few traders. Many succeeded, but many of the traders I have spoken with over the years have failed. I have observed a number of traits which are present in those who succeed. Some of the top traits of successful traders are as follows:

1. Staying Neutral
You're probably wondering away just what do I mean by “staying neutral.” When you are chatting with your trading buddies online or reading a message board and all you hear are how the market maker or specialist is out to get them, or how one minute they are a market god and the next they have what is certifiably the worst luck in the entire world, then you are dealing with a trader that is NOT staying neutral! They are letting each trade or each trading day rule their emotions and this pressure builds upon itself, making it very difficult to succeed.

The professionals don't let the day to day oscillations in their accounts faze them. The results of one day of trading, or even a few weeks or a month are not as important to them as the average over time. Among most of the professional traders I know, you cannot tell by their mere appearance whether or not they had a great day in the market or if they lost. Sure, they may tell you one way or the other.

We are not robots devoid of all emotion after all, but when we leave the market for the day after a difficult session, we are able to disassociate it from the rest of the world and don’t spend the rest of the day complaining or moping around the house thinking that entire world must be out to get us. Similarly, on a great day, we do not call up every person we can think of and tell them how we rule the market universe. Extreme emotional responses either way will often lead to greater difficulty in the market since emotions take over from reason and can often override it, making it difficult to remain objective.

2. Have business Plan
Most successful traders also have a business plan. As in any other profession, it’s important to know what it entails in order to succeed. As in any business, this consists of a set of rules or guidelines to help keep the trader on track and from making decisions purely on a whim.

Would you open a restaurant without a plan? No, or at least I really hope that you wouldn’t! A new restaurant owner must take into account the type of cuisine they wish to serve, the décor of the restaurant, the hours of operation, to whom they are catering as clientele, etc.

As in the restaurant business, traders must also have a business plan. A partial list of the questions you should be asking yourself and including in your trading plan are as follows:

How must time will you spend study and trading?
What techniques and strategies you will focus on?
What are the expenses involved in becoming a trader?
What is your maximum loss limit, not only per position, but on your account as a whole?
What are your objectives?
etc...

The more comprehensive your plan is, the better. You can always go back and change it, modifying it to suit your development as a trader. I find that it is very helpful, for instance, to go back and read over my techniques and goals whenever I am in a slump and my progress has stalled. It helps me maintain the right frame of mind so that I can push forward.

3. Keep a Journal
One of the first questions I ask any of my new clients is whether or not they have a trading journal, and if you, what does it consist of.

Most traders don’t even have a journal. Those that do have one typically keep it in a spreadsheet format. This offers very few insights into a trader’s personal style and strengths and weaknesses. Some things to consider when developing a trading journal are:

What techniques were used in locating the position?
Did you follow your entry, stop and exit criteria?
What pros and cons did the setup have?
What, if anything could you have done better and what are you most proud of?

It is also important to print out a chart of your trade. Mark both the entry and exit on the chart. If necessary, print it out on several time frames to show the details of the position.

4. Focus on Several Techniques that Work Well
Let’s take a minute to look at a typical college student. What kind of person majors in general studies? Unless they go on to focus on a specific occupation in graduate school or law school, etc., well-paying jobs will be hard to find for most of these students upon graduation. Instead, for those who focus their studies in one field, and more specially, one subdivision of that field, demand for their skills will be much higher. If you focus on just a few techniques, it allows you to really become an expert on the technique you are using. Great traders have several strategies that are their bread and butter plays and they will focus on them for as long as the market conditions favor them.

Remember: The jack of all trades and master of none is usually a low-paid, unskilled worker.

5. Being a Great Money Manager
Great traders are also great risk managers. They respect the risks they are taking and on each trade they risk a small amount of capital. Usually this is 1/4% to 1% per position (and no more than 2%). The idea is that you can't trade tomorrow if you blow out today and if you can't trade you won't be a great trader, now will you?

Great traders protect their accounts. It's their baby. Each position is so small they don't really care what happens with it. It's just a nick... win, lose, or draw. So, if they have a 200K account and are risking 1/4% on each trade, if they take a stop they are out $500. That's a very small amount of money compared to the account. They can take a couple of hits and still be in the game.

6. Being Comfortable with Risk and Uncertainty
The sixth trait of great traders is that they are comfortable with risk. Let's face it, trading is certainly risky and if you are afraid of the risk you won't last. If you are afraid you will lose money, then I can say with near-certainty that you will.

Great traders are comfortable trading a pattern that is not a 100% sure-thing, because there simply is no such thing. Many new traders have a terrible time with this: the uncertainty of a trade, but you must overcome it. It is very easy to allow yourself to become frozen with fear over the risks and uncertainties of trading. Great traders get beyond it.

7. Accepting Personal Responsibility
Great traders accept personal responsibility for everything they do, even to an extreme. If I loan you $100 and you never pay me back, then yes, perhaps you are not a very honorable person, but I also made a poor choice to lend you the money in the first place. I made that choice, however, and I must accept personal responsibility for that action.

The same concept applies to trading. Many traders, lacking the expertise and confidence to make all their own decisions to begin with, will rely upon others for advice. The input may come from CNBC or it may come from a newsletter service or trading chatroom or message board. It doesn’t matter where you get the original idea from, it is still up to you to implement it or not and you have the due diligence to stand behind your decisions and make them your own, whether they succeed or fail.

8. Using Risk Capital to Trade
Finally, great traders use risk capital. This should be obvious. They trade with money they can afford to lose. It is very difficult to trade well if you are worrying about paying your mortgage or putting food on the table. I’ve also seen a number of traders over the years take out equity loans to open a trading account. You are supposed to be limiting your risk and outside stressors, not adding to them if you wish to succeed. If you think you can be one of the exceptions, then you should really think again!

Trading with risk capital frees up your mind. It lets you trade and not worry about every little stop you have. You can just focus on trading correctly instead of trying to force yourself to meet certain financial needs. They say scared money never wins. Well, I have yet to see a person who has no other source of income or savings make a living off their $5,000 trading account.

Many of these traits may take a bit of time to acquire. Overcoming the fear of loss, for instance, haunts many, but by focusing upon these traits and characteristics, my hope is that you may model your own frame of mind to those who have come before you and have made the leap to a successful and long-lasting career in the markets. It is said that the majority of successful people in the world became such by following in the footsteps of others, their mentors. Even if you do not have one specific person in mind, familiarizing oneself with the traits of those whom have succeeded before you is a great place to begin!

Conclusion: Many traders have dreams but they don’t act on those dreams. Even when they act, it’s usually one or two attempts, for they give up quickly as soon as they run into difficulties. As far as they’re concerned, there’s nothing like persistence. They think successful traders are successful only because they’re lucky to have easy methods of profitability. NO. Ask successful traders, and they’ll tell you how long or how many years it takes them to achieve consistency in the markets. They’re not luckier than you: they’re only more persistent than you.

This piece is ended with a quote from Toni:

“Knowledge is power. This is as true in trading as any other area of life. Those who don’t know will eventually give their money to those who do know. In this industry we have 90% of the money going to 10% of the players. Do you want to be part of that 10%?”


Source: www.tallinex.com

What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html

Should I Ditch My Trading Method? – Part 1

A Crucial Question from All Traders

A positive expectancy method makes you risk less than you plan to win; reverse the logic for a negative expectancy method. Therefore, a negative expectancy trading method is what you must abandon, for there is no reason for you to abandon a positive expectancy method. There is no trading method under heaven, no matter how good it is, that does not go through occasional losing streaks. How should you treat a good method that is currently in a losing streak? This piece gives factual and useful advice for all traders: whether beginners or experts.


Should I Ditch My Trading Method?
When you ditch your trading method for another one, the new method may experience a losing streak right from the start, while it later experiences a winning streak; or vice versa. You can win without even considering the economic effects on a market, for they have already been priced in. When you are using a negative expectancy method, you may want to over-optimize it during back-testing and believe it works fine in future. If the strategy works contrary to the belief, you conclude the system is bad, ditch it and buy another heavily hyped one. Please bear it in mind that if a method worked in the past (as long as it is not a negative expectancy one) it is not bad. It simply means the current market situation is not favorable to it. Is this assumption logical? Think about it. Positive expectancy.

You would know that your method works and the market favors you when you are in a winning streak. The consistent profits you generate would let you know that the market favors you. The more profits you make through a method, the more faith you have in the method. You use it more frequently and look forward to further trading setups. You cannot wait to trade further setups – sometimes making mistakes of trading suboptimal setups, which make you plunge into a losing period because there is no-one who generates profits (with no losses) for life. The losing period makes you get angry, and you ditch the method. At the time of ditching, the method is about to start making profits again (but you would never know because you are no longer using the method).

When you tell people that the method is now useless, that is when the markets might become favorable to it again. When a good method has sensible positive expectancy incorporated into it, it would not become useless forever. There would always be days and nights in succession; day after night and night after day. There would be periods when a good method would be working contrary to the markets and there would be periods when it would work in agreement with the markets. Why would you throw away your baby out with the bath water? May be you could stop using the method after you have lost a predetermined amount of small percentage or use another transient method that works in agreement with the current market conditions, so that you resume using the previous method when you sense the market is favorable to it. In a bear market, you use a method that allows you to sell. In a bull market, you use a method that allows you to buy. In an equilibrium market, you use a range trading method or stay out of the market.

It is important that you sense when a method temporarily stops working in a current market condition so that you temporarily stop using it. For instance, consider the art of following the line of the least resistance, the art is useless when an instrument is in an equilibrium zone, albeit it enables to people garner gains when the instrument again begins to move in a predictable manner. This happens now and then, year after year.

What can you do to escape this kind of pitfall when you know that your method is meritorious? How can we know whether a market condition would be favorable to it or now? Ultimately, what is most important is to realize when a method is profitable, when to stop using it temporarily and when to start using it again. Please do not ditch your method if it is a positive expectancy one! You merely need to stop using it temporarily when it works temporarily against the markets. The method might soon resume working in favor of the markets. Can you recognize this when it happens? You would need to keep this in mind and sense when the markets are favorable to the method again. The trading results would determine that.

A writer once mentioned that Richard Donchian, who was an astute trend follower for several decades, began trading in 1979 with only twenty thousand dollars. This small portfolio was increased to eighteen million dollars over many decades. While the achievement was commendable, many traders would find it difficult in reality because there were periods of losing and winning streaks. He was able to achieve the goal because he aborted his losers and rode his winners: plus he was not discouraged from opening the next order. He did not ditch his trading methodology that experienced drawdowns, alternated with gains. It was easy to blame our method rather than ourselves.

If you abandon one trading method for another and you do that over and over again, you would never appreciate how a method may survive drawdowns and recover from them. Whether the trading method is used systematically or discretionally, you need to be faithful to it. The longer you use a method, the more you would appreciate it and the more returns it might generate for you.

Source: www.tallinex.com

Weekly Trading Forecasts on Major Pairs (May 9 - 13, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Neutral
EURUSD went upwards on Monday and Tuesday, topping at 1.1615. Since then, price has come down by over 200 pips, closing at 1.1403 on Friday. It is clear that the gains made by bulls have been erased by bears, but the bias on the market would not really turn bearish until price goes below the support line at 1.1300. That is exactly what is expected this week: The outlook on EUR is bearish and the currency would be weakened against other majors. By the end of this week, there could be a Bearish Confirmation Pattern on EURUSD.

USDCHF
Dominant bias: Bullish
Between Monday and Tuesday, this pair dipped into the support level at 0.9450. From that support level, further dip was rejected as price assumed a clean northwards movement, closing on Friday, above the support level at 0.9700. That was a movement of over 280 pips! This week, the market area to be attacked first would the resistance level at 0.9750, after which bulls would carry their battle towards other resistance levels at 0.9800 and 0.9850. The bullishness on USDCHF ought to have become more conspicuous by the end of this week.

GBPUSD
Dominant bias: Bullish
Here, bulls managed to push price towards the distribution territory at 1.4750 – a juncture at which they were overpowered by bears. Price has come down 320 pips since then, closing below the distribution territory at 1.4450. What next? Since the outlook on USD is bright for this week, GBPUSD might have some difficulties going upwards (although that is not an impossibility). On the other hand, GBP would be strong in its own right, and it may be seen going upwards versus other currencies like EUR, AUD, and NZD.

USDJPY
Dominant bias: Bearish
This currency trading instrument simply consolidated throughout last week, though in the context of a downtrend. The possible direction on USDJPY is ambiguous for this week. We might see bears pushing the pair further southward; whereas it is a probability that could be frustrated by expected stamina in USD. The monthly outlook on JPY pairs is bearish till around the end of the May, when they might rally.

EURJPY
Dominant bias: Bearish
Last week, this cross also behaved almost similarly to USDJPY. There were fleeting upwards and downwards swings on the cross, while the bias remained bearish. This week, we could see further bearish movement on the cross, which might take price below the demand zones at 121.50 and 121.00. Since the current outlook on JPY pairs is bearish and EUR is also expected to be weakened, EURJPY should decline further.

This forecast is concluded with the quote below:

“I was born in San Juan City, Argentina. It is very close to the Andes Mountains. I have a degree in Business Administration. I've always been interested in trading, but what really forced my hand, and made me absolutely need to become a full-time trader, was a conversation I once had with a professor. When he learned I was experimenting with different automated trading algorithms, he laughed and told me I was a fool to think I could beat the market. Challenge accepted! From that moment, I became a trader!” - Maximiliano Lepez (Source: Collective2.com)

Source: www.tallinex.com

Alan Howard: A Self-made Billionaire Trader

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 8

“Try not to do something just because everyone else is doing it. Successful traders are rare. If the crowd is doing it, watch out!” - Andy Jordan

Name: Alan Howard
Date of birth: September 11, 1963
Nationality: British
Occupation: Hedge fund manager and philanthropist

GIVING BACK TO THE SOCIETY
Alan was born in UK, to a Jewish family. He attended Imperial College London, bagging an MSc. He then began working in the financial industry.

He co-founded Brevan Howard Asset Management LLP. In the year 2014, Forbes named Alan one of the 40 highest-earning hedge fund managers. In the same year, he was mentioned in the 53rd rank of the Sunday Times Rich List. This is a proof that the fund management company he co-founded has been successful. As of April 2015, Alan was worth GBP £1.5 billion.

One source reveals that Alan serves in other capacities like on the New York Federal Reserve's Investor Advisory Committee on Financial Markets and is one of a group of financial managers who on occasion advise New York Federal Reserve officials on economic policy. He’s also engaged in various charitable foundations that support Jewish causes and other needs.

He was a former director of the Conservative Friends of Israel. Alan is married to Sabine Howard and they’re blessed with 4 children. He lives in Geneva, Switzerland.

What You Need to Know:
1. Alan is a self-made billionaire. He wasn’t born a billionaire. You might not have been born with a sliver spoon, but you can attain you goal of financial freedom. Alan made his money from the markets, and you can too (though you might not be as rich as him).

2. No matter how good you’re, you’ll have losing weeks or month. Alan’s Brevan Howard Asset Management had a losing year in 2014, which made the firm forfeit some of its funds. As long as you are able to survive losing weeks, months or years, you’d be fine.

3. Veteran speculators often open more positions than neophytes; for veteran speculators follow most of their trading signals religiously while neophytes shrink from fear of opening trades that might turn out to be losers. The criteria being considered by each camp differ, since veteran speculators aren’t swayed by noises. Neophytes open big positions relative to their portfolios, whereas veteran speculators use prudent volume sizes. Although, veteran speculators open more positions than neophytes, their risk is remarkably less per position. This fact is in harmony with the notion that that equity fluctuations and market impacts are more telling on neophytes’ portfolios.

This article is concluded with a quote from Charles Sizemore:

“…My style is not right for everyone. Other people try to invest the way I do and fail, just as I often fail when I get outside of my areas of expertise and try a style that is not suited for me.”

Source: www.tallinex.com

Should I Ditch My Trading Method? – Part 2

“Trading can be a matter of probabilities. Sometimes you'll be at the right place at the right time; at other times you won't. That's all right. If you are consumed with perfection and finding the ultimate trading opportunity, you will often miss the trades that are right in front of your nose.” – Joe Ross

Developing a Winning Trading Method
There are repercussions to be experienced when using a certain approach. You have to think about various market conditions when creating a strategy; otherwise you would end up being frustrated. So what you need to do is to look for proven and time-tested trading setups. You would not only need to create a speculation approach that works in the long run, but you would also need to use it flawlessly in particular market conditions. This is what would let you appreciate the merit of such trading approach.

1. Your method needs to respect the dominant bias. Many veterans of the markets who have developed numerous trading strategies agree that they prefer to pick trades in the direction of the trend.

2. Honestly, it would also be helpful if the method can detect when the dominant bias would be coming to an end or when it would no longer be logical to follow it. This is the real secret behind consistency.

3. Define your entry points which stack the odds in your favor. For example, it is better to buy a pullback in the context of an uptrend or sell a rally in the context of a downtrend. This allows you to set optimal stops and targets. Buying a rally in the context of an uptrend may cause you to get stopped out before the price has the chance of moving in your favor.

4. You must always give yourself an RRR of 1:2 or 1:3. This ensures that you make money with only 40% or less hit rate. Then if your hit rate is 50% or above, how happy you will be!

5. It would be very difficult for you to sustain a huge roll-down on your account if you risk only 0.5% or 1% per trade. This also means that your losses are small and easily recovered.

6. Of course you continue to trades every new setup as long as you are winning. When your losses exceed a predetermined amount, you may stop trading for the day if you are an intraday trader, or stop trading for the week if you are a swing trader, or stop for the month if you are a position trader. This is the best way to avoid continuous losses in a losing streak. By the time you resume trading, it is probable that you would stumble on a winning streak. For example, I stop trading for the month if I go down more than 7%.

Conclusion
It is normal to become emotional after a losing streak. However, veterans remain calm in a losing streak. They believe in their strategies. They simply know that a winning streak is around the corner, and they remain faithful to their trading rules. This has become their second nature, so easy. This is not easy for noobs who tend to ignore the realities of trading. Market wizards experience losses triumphantly. You too need to use subtle approaches and recognize great trading opportunities.

According to Jack Schwager, if you asked most people to categorize good trades and bad trades, you would find the answers to be quite simple… If it makes money it’s a good trade, and if it loses money, it’s a bad trade. That’s not true at all…

His quote ends this piece:

“Any approach will give you instances of winning or losing. If you have an effective approach, you will hopefully make more money than you lose. If you take a trade that follows your process exactly (whatever that process may be… fundamental, technical or otherwise), and if that trade loses money, that was not a bad trade. It’s only a bad trade if you deviate from your process and lose money. I would go further and say that if you deviate from your process and make money, it’s still a bad trade. People have to differentiate between trades that are consistent with a winning strategy, and trades that are inconsistent. That’s the mark of good and bad trades.” (Source: Thoughteconomics.com)


Source: www.tallinex.com

Ottavio Biondi: Trading with Powerful Strategies

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 9

“As a trader, the brutal truth is that you only get paid for your results. There is no 'time and a half', or over-time rates. We live in a results economy, not a time economy, like people who have ‘jobs.’’ – Louise Bedford

Name: Ottavio Biondi
Nationality: American
Education: M.B.A. (Harvard University)
Occupation: Trader and fund manager

GETTING A GOOD STRATEGY OUT OF LOTS OF CRAP
Ottavio is a co-founder and managing partner of King Street Capital Management, LP, launched in 1995. He and another co-founder, Brian Higgins, manage the firm’s portfolios.

King Street tripled in asset value from 2006 to 2010, rising to an all-time high of $19.9 billion.

The firm speculates on bonds, equities, currency, warrants, and options across four funds, looking for distressed and undervalued firms, value investing, capital structure trades, spin-offs, mergers, and acquisitions. The firm engages in short and long trades.

Ottavio got married to Jamie Nicholls in 1997.

What You Need to Know:
1. King Street Capital Management has been doing well overall, though some years were better than others. The year 2011 was an example of a bad year, but the loss was only 1.2%. Compare this with portfolios that lost tens of percentage. Don’t forget that small losses are very easy to recover. In 2012, the firm made a net profit of 12.4%.

2. Please see the quote above, Ottavio Biondi made a personal income of $100 million in 2013. This is an example of payment for results.

3. Sometimes, an empty barrel makes the loudest noises. Most of traders who shout online and on the media aren’t successful in the markets; whereas there are unknown traders, who’re silent, and yet they make cool money consistently. According to Bidnessetc.com, “both Biondi and Higgins seldom appear for interviews or press meetings, since the inception of their fund in 1995 in New York. At the beginning of 2013, the firm managed $18.5 billion and it is yet to conduct an investor day. An investor day is a normal occurrence for many hedge funds, where the managers interact with prospective investors and try to woo them to invest in the fund. The co-founders believe that their primary job is to manage assets rather than mingle with the clients. Biondi’s philosophy puts emphasis on higher returns and believes a better fund performance is the best indicator to attract investors.”

4. As far as Ottavio’s King Street is concerned, results speak volumes, owing to good strategies the firm uses. For you to get paid as a trader, you need a good strategy. Unfortunately, many strategies are simply useless, while good strategies are as rare as diamonds.

Then how do you get a good strategy when majority of strategies aren’t useful? A very helpful answer has been provided below, from an invaluable website called Collective2.com. This website is where numerous winning traders use strategies that are copied by many, many thousands of astute investors. Here’s the answer in form of a short article:

The Role of Trash Cans in Developing a Trading Strategy
“When you develop trading strategies as your profession, a large portion of your work ends up in the trash can.

Almost every week I have a new trading idea. And usually, that idea seems "good" to me. So I turn it into a computer program.

Then I study the back-tested results. And usually (about 98% of the time, I estimate) - the so-called "good" strategy goes straight into my trash can.

Why? Because once you analyze a strategy over the course of several years' worth of historical data, you see the blemishes, and you realize that the "good" idea isn't actually so good after all.

Okay, what about those other 2%?

Well, next I look at the results, in the form of a graphical representation of the strategy's equity gains and losses. If the graph look like a mountain range - up and down, up and down - then it goes straight into the trash!

Okay, what next? Next, I look at the average annual performance. Is it higher than the maximum drawdown? No? Into the trash!

Next, I examine the annual gain per position. Is it greater than typical slippage and commission per trade? No? Into the trash!

So, as you can imagine, there's a lot of crap piled up in my trash can, representing hundreds of hours worth of programming, and data analysis, and study. All of it - in the trash.

To me, that's a mark of success. It means I'm selective, and I don't rush into things. I'm dealing with money, after all. One must be careful.” - Gianni Salerno (Source: Collective2.com)

Source: www.tallinex.com

Difficult Markets Produce Fine Results – Part 1

“Trading requires you to be wrong on a regular basis – in fact you are wrong more often than you are right. And this constant grind requires a certain degree of fortitude to endure.” – Chris Tate

There’s no way to become victorious easily.

You don’t become victorious by trying to be victorious. You become victorious be surmounting the challenges life puts in your way.

Trading success doesn’t come by accident. You’d attain it through hard work, humble acceptance of reality, faithful endurance under difficult challenges. What a remarkable example for many traders today! Never forget that your breakthrough is largely in your own hands.

Trading mastery isn’t beyond your ken, though you might emote that nothing good comes cheap. Where you’re coming from doesn’t matter, but where you’re going. Your dismal trading experiences shouldn’t deter you from attaining your dreams as a victorious trader.

Difficult Markets Produce Fine Results
Unlike those who become envious and sad when they see their fellow human beings making solid achievements in life, I’m happy whenever someone becomes successful in life. I’m happy whenever I come across a successful trader, just because it strengthens my conviction that it’s possible to be a winning trader. This also serves as a powerful testimony to doubting Thomases in the public.

As a one-on-one trading coach (not via webinars or trading rooms), I’ve trained many people the art of trading and I’m happy whenever they go on to become successful market players.

Some people completed their training and then abandoned the markets. Some didn’t bother to finish their training. Some completed their training and then abandoned the Golden Rules given to them, doing something else. Every strategy under the sun must be accompanied by the Golden Rules; otherwise the joy of trading won’t last long.

I need to mention this fact: Trainees simply do themselves a favor when they get coached by successful traders who’re also talented teachers. It’s common for someone to think they’re doing you a favor by hiring you to coach them. Unless the coach isn’t a successful trader on her/his own (which is very common), it’s the coach who’s doing the trainees a favor by revealing their winning systems, which took them many years to perfect.

It’s a great joy for me to see that some of my former trainees are now successful – a good evidence that difficult markets produce fine results.

One of those successful traders who happened to be a past trainee is called Caleb by name. He got coached several years ago and undoubtedly, he was practicing with the markets.

Last year, some of his acquaintances told me that Mr. Caleb had been making money from the markets. That was no big deal, for the Golden Rules of trading work for everybody who applies them faithfully, but what made me surprise was the fact that year 2015 was a very difficult year for traders, and if anyone made money in the markets in that year, then it’d be much easier for the person to make money in years when the markets become favorable.

I began to plan an appointment with Mr. Caleb because his trading results in the year 2015 were 3 times better mine (who’s his former coach). Some days later, he sent me his full account history. I was amazed to see that he made decent profits in the most difficult months of that year. This guy wasn’t a lucky gambler who used high risk to make maximum profits in a short period of time. Instead, he’s a conservative trader who goes for very small but consistent profits.

I was also amazed by these facts I discovered in his trading habits:

1. His was trading manually
2. His trading took him only 5 hour per week, for he was then working full time for an employer
3. His position sizing methods were safe and sensible
4. He used stop loss and stuck to them religiously
5. He’s one of the most disciplined traders I’ve ever seen. He sometimes cuts his negative positions before they hit his stops
6. He sometimes used take profits, but not always (a method exposing him to unlimited gains which can wipe out his many small losses)
7. He’s the fortitude and patience to endure days or weeks of losses, knowing that some big wins would soon wipe out those losses

The above list is part of his secrets. I think some of these things are what every trader should do, irrespective of their trading methodology.

One day, as I was walking beside a paved road on a campground, he pulled up his jeep and gave me a lift. We talked briefly and he gave me an appointment. I appreciated this because he was a very busy man.

That’s another point. He was able to trade his way to success despite his very tight schedule, contrary to the excuses certain people give for not trying trading (they wrongly think they’re too busy to trade). I was able to see Mr. Caleb where he lived. He told me that the trading method he used was similar to what I gave him several years ago, but with some modification.

What was this modification? That was what I wanted to know. Clearly a former trainee can become better than his coach. Mr. Caleb is a good example. He’s a bright trader indeed!

I interviewed him about his entry criteria, risk control style and money management approach. What were his stop loss and take profit levels? What factors did he consider before making trades? What about his exit strategies? Mr. Caleb took out his laptop and explained everything to me in a generous and transparent way.

The interview was an eye-opener. It would be posted in the second part of these series, so that you can gather some points that might potentially help you in your own trading too.

This piece is ended by the quote below:

“The fact that I trade my own strategy, in my own broker account, lets people know that I believe in my own work, and I'm willing to stand behind it with my own money.” - Jan Roozenburg

Source: www.tallinex.com

Alfred Jones: The First Hedged Fund Manager

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 10

“There’s no way to start a business without being bad at those things. People who are good, are good because they spent ten years being bad. Note: You have to love being incompetent in order to be competent.” – James Altucher

Name: Alfred Jones
Date of birth: September 9, 1900
Nationality: Australian, American
Occupation: Sociologist, author, financial journalist, fund manager

STARTING THE FIRST MODERN HEDGE FUND
Alfred was born in Australia but his parents took him to the States when he was 4 years old. He graduated from Harvard in 1923 and then worked as a purser on a tramp steamer.

He later joined the Foreign Service, becoming vice consul at the U.S. embassy in Berlin during Hitler's rise to power. He earned a PhD in sociology at Columbia University.

He worked for Fortune magazines in 1940s, also writing articles on non-financial subjects.

After an extensive study of the markets, Alfred discovered how they worked and decided to get his feet wet. In 1949, he started the first hedge(d) fund with $100,000 (40% of which was his own money). The fund made a profit of 17.3% in its first year.

The firm became successful, and the name of the partnership was changed to A.W. Jones Company in 1970. In 1984, its fund was transformed into a fund of funds, investing its capital in other hedge funds with different areas of expertise and investment styles. Alfred was also involved in other activities like Peace Corps.

He died on June 2, 1989.

What You Need to Know:
1. Alfred had a deep knowledge of the markets. You need a deep knowledge of the markets. More importantly, the direction of the market does not matter as much as picking the right stocks to buy and sell. Like Alfred, who started the first hedge fund, you can bring new ideas into the world of trading.

2. He started what is now part of hedge fund industry standards like choosing to take 20% of profits as compensation, charging no fees unless profits are made, and opening long and short positions.

3. Alfred and his business method wasn’t widely known until 1966, which emphasizes that there are many quiet-spoken market speculators nowadays who aren’t famous, but who’re successful.

4. Your success will encourage others. One source says Alfred’s hedge fund had then outperformed the best mutual fund over the previous five years by 44 percent, despite its management-incentive fee. Mr. Alfred's hedge fund had beaten the top performer Dreyfus Fund by 87 percent. This led to a flurry of interest in hedge funds and within the next three years at least 130 hedge funds were started, including George Soros's Quantum Fund and Michael Steinhardt's Steinhardt Partners. What can you learn from this? You success will encourage others who will also become triumphant simply because they were inspired by your success in the first place.

5. The road to success is bumpy. Alfred also trod on a bumpy road. You can’t win every month (or possibly every year), no matter how good you’re. I read that Alfred Jones's investors lost money in only 3 of his 34 years. By contrast, the S&P500 had 9 down years during a similar period.

6. Alfred’s son in law joined his business and become Managing Partner in the following year. Awjones.com reveals that the family tradition continues at A.W. Jones. Alfred’s’ grandson, Robert L. Burch, IV, became a General Partner in 2003 and manages the firm with his father. Your legacy lives on after you pass on.

Conclusion: Do you want to become a triumphant trader and leave and enduring legacy for your posterity? Remember that Alfred W. Jones studied the markets for many years. More importantly, a useful advice is given below.

“[There are] parallels between trading and professional sports. Both of them need extreme dedication and mostly rely on intuitive skills rather than learning by the book. In both you need many hours and even years of practicing to achieve good state of mind to be able to reach the best possible results. There is no professional sport player achieving his success in less than few years, the same with trading. I still remember the most cited quote of Gann that he paper traded for 10 years before entering the real market. He is famous with his many years of success on wall street, more than 50 years. So basically yes, we can compare professional trading with professional sports, but the stakes are much much higher and only the sky is the limit for the reward if you are great in the financial field. Unfortunately very few of us have the courage and patience to learn consistently the market for so long. Everybody is searching for fast money these days but this is not the true path.” –– Kolyo (Source: Binaryoptionsthatsuck.com)

Source: www.tallinex.com

What Brexit/Bremain Will Do to the Markets

“What matters is your ability to pick up the flying gobs of money whizzing past your ears in the financial markets money storm.” – Louise Bedford

Originally, I planned to post an article titled: “Difficult Markets Produce Fine Results – Part 2.” But I can see that the media are making noises about the coming Brexit or Bremain, just like they did when the issue of Grexit was hot.

A referendum is being held on Thursday, June 23, 2016, to decide whether Britain should leave or remain in the European Union.

Since the outcome of the referendum will impact the markets, it is worthwhile to know the nature of the impact and how exactly the markets would behave during and following the referendum.

Traders want to know what the market would do, whether it would go up or down or simply fluctuate wildly without a directional movement.

What would the markets do? I’ll tell you what the markets are supposed to do, and that’d be my opinion. Everybody is entitled to her/his opinion.

If you could recall my Annual Trading Forecasts for the year 2015, it was mentioned that USDCHF would experience a large pullback in January. That was exactly what happened.

What Would Happen to the Markets on June 23 and After
The Brexit/Bremain issues would affect mainly GBP pairs (Just like the SNB action of January 15, 2015, affected mainly CHF pairs). When I mention major GBP pairs, I mean GBPUSD, GBPJPY, GBPCAD, EURGBP, GBPAUD, GBPNZD and GBPCHF. These pairs are already trending strongly; but that is their normal behavior. Please check historical data.

Whether Britain chooses to remain in the European Union or leave, there would be strong movements in the markets. The movements would be stronger in case Britain chose to leave the EU. The currency market is like a rubber band: If it moves too far in one direction, it’d soon snap back. Accumulation and distribution territories are present to check strong trends.

Nevertheless… No matter what the outcome of the referendum is, there will be no unprecedented volatility in the markets.

In my recent markets forecasts, it has been mentioned that GBP pairs would experience strong volatility this month (plus NZD pairs). This is because GBP pairs usually move strongly in June while most other pairs experience low volatility. Bremain/Brexit issues are only a catalyst that will spur the usual strong movements on GBP pairs this June.

The market has a knack for going against people’s expectation. Events that people don’t anticipate are what cause surprise moves, not events that people anticipate. People didn’t anticipate the unprecedented CHF pairs volatility that occurred on January 15, 2015 and there were surprise consequences. Another instance of an unexpected event that caused surprise movements was the last major earthquake in Japan, in March 2011, which also caused nuclear fallout.

Grexit was hyped as something that might have a serious impact on the markets. What then happened? There was nothing significant or extraordinary, as far as the markets were concerned. Even there were far stronger movements in the first few months and the last few months of 2015, than when the Grexit issue was hot.

There wouldn’t be any unpredicted movements or volatility on GBP pairs (just like Grexit caused no special movements in the markets), save strong movements that are not more than anything that has been witnessed so far this year.

Whether Britain exits the union or remains in it, the markets will simply do what they’re known for. The markets will move, presenting good money-making opportunities for astute traders. The stronger the movement, the more money we make. After all, no money can be made in a market that doesn’t move well (unless you’re a scalper).

It’s good to open trades based on what the markets are doing, not based on what you think the markets would do. Yes, trending movements would develop further – a thing that good traders are prepared for.

Final Thoughts
Please, use risk control methods in your trading, so that adverse movements don’t have an adverse effect on your capital; while a favorable movement would have a satisfactory effect on your capital.

As ever, it’s good to risk very small per trade. When a position moves against you, you should be protected by a stop, having no worries, provided your stake is also small. When a position moves in your favor, you should make a decent profit.

However, certain traders might want to stay away from GBP pairs till the end of the month, if that’s what you prefer.

Once again, GBP pairs would trend strongly this month, but don’t expected any movements that would be stronger than what we’ve already witnessed this year, not matter the outcome of the referendum.

Do not expect any surprises when the public are anticipating them. Surprises come when the public don’t anticipate them.

This article is ended by the quote below:

“I‘ve seen a lot of aspiring traders over the years, trained some of the current leading coaches/mentors, worked with some amazing authors/hedge funds and seen a lot of people make this work. The ones that don’t make it work are often the ones that think too much and try to reinvent the wheel - or be / think they are - smarter than the markets. Stop trying to hit a hole in one and start treating this like a business and look to make an average profit on a consistent basis. This will work for you, whatever and however you decide to do it.” – Phil Newton (Source: Trade2win.com)

Source: www.tallinex.com

Brevan Howard: Trading with the Highest Standards

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 11

“If there are people in your life who do not support your efforts to become a successful trader, avoid them. Avoid those who express negative energy on a regular basis, and vent their hostilities towards you. Wherever possible, terminate unhealthy emotional relation¬ships that cannot be repaired, and if necessary, do it immediately.” - Joe Ross

Name: Brevan Howard
Industry: Investment management
Products: Hedge funds
Website: Brevanhoward.com

ONE OF THE LARGEST MACRO HEDGE FUNDS
Brevan hedge fund was co-founded in 2002 by 5 experienced traders, although some of the founders have left the firm.

The company was headquartered in Geneva in 2010. It opened an affiliate firm in New York in July 2012, called Brevan Howard U.S. Investment Management LP. In June 2013, the company was reported to be the largest European hedge fund management firm based on its total assets under management of around $40 billion.

The company manages 11 funds and it maintains so high standards for trading success, that some traders who were dismissed from Brevan Howard have become “stars” at other trading companies.

Brevan Howard has donated generously to Imperial College Business School, Alan Howard Scholarships for Energy Futures, and the ARK Bentworth Primary Academy.

What You Need to Know:
1. According to Wikipedia, the company received $2 billion to manage in the global macro fund from Credit Suisse Private Bank. Under the leadership of Brevan Howard's founding partner, assets grew to $10.5 billion in 2006. The company generated a 25% return in 2007 and returns from their global macro fund continued to perform well during the financial crisis of 2008.

2. Alan Howard hedge fund has had many glorious years of nice profits, but not without losing years. In some years, the returns in terms of percentage were small and in some years, the losses were small. In some years, the losses were big. However, the firm has been hugely successful overall. Such is trading.

3. What are Brevan Howard investment strategies? According to founding partner, Nagi Kawkabani, the firm's overall strategy is focusing on near-term opportunities and establishing investment positions that are maintained for one to six months. As a macro hedge fund the company wants to make gains from broad economic trends and speculates on various assets including commodities and currencies.

This piece is ended with the quote below:

“I suggest, though, that no matter what percentage you choose, consider keeping it the same on all of your trades, because if you don’t you in are, in effect, starting to handicap your trades. When I cover this point in my webinars some of the attendees say to me, “I risked a higher percentage of my account on Trade A then Trade B because A looked better,” to which I respond ,” Why would you enter a trade that looked less than perfect and didn’t meet all of your trade selection criteria?” The reality of trading, of course, is that we never know which of our individual trades will work out. We only know that over a series of trades we should win “X%” of the time based on our particular trade selection methodology.” - Lee Bohl (Source: Trade2win.com)


Source: www.tallinex.com

Difficult Markets Produce Fine Results – Part 2

“If you can trade like a hedge fund without investing in one, you can replicate their big wins without having to pay their huge fees.” – James Altucher

In the first part of the article in this series, I mentioned that Mr. Caleb (a former trainee), who’s found his edge in his market, was interviewed. He’s interesting facts to reveal about trading, plus how he makes his money from the markets. Here we go:

Analyst75: What motivated you to get trained for trading in the first place?

Caleb: I was interested in trading because of its benefits. When I was introduced to a seminar, I attended it with a friend. I’ve to say that the seminar was a disaster to me, because all they could say was “you can make so-so amount of money,” “you can become financially free,” and all those marketing stuff. They didn’t show how that could be done, except to sell something they believed would work. Such was most of the seminars – useless. So I decided to explore other options. When I came across my former coach, I was encouraged again, but for a one-on-one training at that time.

Analyst75: What did you learn during the training?

Caleb: The training was an eye opener, because I was taught how the markets really work, plus trading principles that are useful. It was different than the get-rich-quickly stuff that sells you something and goes away. After the training, I practiced more and more and more. With some viable modification, here I am.

Analyst75: How do you determine when to buy and when to sell?

Caleb: I’m a systematic trader, with a large amount of discretion, however. I don’t trade flat markets, which means my candidates are usually trending markets. I follow the trend, using MACD and EMA to determine a major bias on a particular market, especially in the medium-term. I prefer hourly charts because they aren’t too big or too small in terms of time horizon. Then I use economic news/fundamental figures to pinpoint entry points. I trade mostly news that pushes the market in the direction of the dominant bias, for this comes with higher accuracy. Needless to say, some news releases don’t move the markets: I simply ignore those. On rare occasions, I trade news that pushes the market massively against the trend. This is where discretion comes in. In some cases, price action will reveal that an existing trend has reached maturity, and is getting tired.

Analyst75: What do you stops and targets look like?

Caleb: My stops range from 30 to 100 pips. I don’t set take profits unless I’ll be away from the markets for several days. In that case, my stop would be a minimum of 200 pips. Sometimes, I sustain small losses for weeks, but I’m happy as long as the losses are kept small. Huge moves in my favor often wipe those small losses away, giving me decent profits over time.

Analyst75: How long do you hold onto an open trade?

Caleb: I hold onto a trade as long as the market goes in my favor. A trend may last longer than most people think and bigger profits are present in sustained trending movements. When a trade fails to develop in the way I previously think, I’m quickly out! Sometimes, I don’t even wait for my stop to be hit before I quit a trade. This doesn’t mean I exit a trade on noises only, as mere noises would cause transient movements against my direction, this is where a little discretion helps.

Analyst75: How do you feel when a trade goes against you?

Caleb: It’s merely one of those normal things – as long as you keep the losses small. I see losses as part of business. Most business would have periods of losses, slow growth, etc. Why should trading be different? A losing streak is a good indicator that a winning streak is around the corner; and that helps me keep my chin up. I know that when I lose, some winning trades would soon materialize.

Analyst75: How do you feel when you win a trade?

Caleb: Normally I feel great. I feel satisfied whenever I’m in a winning streak. That’s part of the beauty of trading.

Analyst75: What are your favorite pairs?

Caleb: EURUSD, AUDUSD and USDJPY. To me, they’re easily predictable.

Analyst75: Do you see yourself teaching others to become successful at trading?

Caleb: Nope. I’m not good at teaching/coaching, and I don’t think I’ll ever become a coach. If there’s anybody who wants to learn trading, they’ll have to find a good coach to show them the way.

Analyst75: Do you believe in trading robots?

Caleb: Robots are good, but a little discretion helps good traders. Robots follow strict rules, which may bring disaster when the market conditions are at variance with the rules. Most trading systems are rubbish, and when programmed, they produce useless robots which might accelerate your bankruptcy. Artificial intelligence is garbage in, garbage out.

Analyst75: Do you think you might change your trading method in future, applying some flexibility?

Caleb: No-one can become a master trader overnight. Anyone can learn how to buy and sell, but trading mastery takes time. In a few days, you can learn driving, but that doesn’t make you an experienced driver. A person who’s just learned how to drive might not be able to handle some challenges that a driver has to face, like driving in all weather conditions. Trading is no different. If I discover that a particular rule might improve my trading results, I’d first try it in a simulated mode for 4 – 6 months. If the results are satisfactory, I make the rule part of my trading strategy.

Analyst75: Most members of the public fear trading. They even discourage others from trading. What do you think about this issue?

Caleb: People fear the unknown. Yes, they’re scared of what they don’t know, including what they think they know, but which they don’t really know. A novice may discourage other novices because they think they know somebody who lost their money in the markets, and so the losses in other areas of life would be an exception or a normal thing to them. Only a loss in trading is what they think is abnormal. I think the right mindset is to determine to succeed where most others fail, like trading.

Analyst75: How do you combine your day job with trading?

Caleb: I trade mostly in the evenings when I get back home from work: before I sleep. I spend less than 5 hours per week on trading. So, it’s pretty easy for me to trade while keeping my day job.

Analyst75: As far as trading is concerned, what’s your plan for the future?

Caleb: I want to be the best trader I can be. I want to be the best trader in my country. I like the joy of financial freedom trading brings and I’d like to live a quiet life in a natural environment, away from the city, where there’s too much noise. I’ll soon abandon my day job to become a full-time trader, living the kind of life I really want.

Analyst75: Would you like one of your children to be a trader in future?

Caleb: I believe each child is unique, created by the Providence to fulfill a specific destiny. This might not be trading in most cases. I’d be happy if a child of mine becomes a trader, but if they choose another course of life, I’d be happy too as long as they don’t have “I beg to apply” mentality. Becoming a trader isn’t by force; it’s by choice, although it’s a good vehicle for financial freedom. One thing I’ll surely do is that, I’ll inculcate the spirit of self-reliance and self-dependence into them as early as possible. Our parents don’t show us the way to be self-sufficient. They make a big mistake just by telling us to go to school and look for jobs, which to me, isn’t the best way of life. It’s a horrendous thing to be at the mercy of a boss. There’s a vast difference between living and existing. You’ll need to choose for yourself.

Analyst 75: Do you have any advice for traders?

Caleb: When it comes to Forex trading, patience is a virtue. Patience pays a lot. Traders should be optimistic and look forward to better trading results, even in the face of a current challenge. When you’re using a good system and facing a temporary period of loss, always look forward to a period of profit, which is around the corner.

Analyst 75: Thank you Mr. Caleb, for this great interview.

Conclusion:
This interview is concluded with a poem-like advice from an astute female trader:

I See You

I see you.

I see your focus, and I can picture what this will mean for your trading future.

I see your trading scars, and I know that some of them came close to breaking your heart.

I see your hope for the future, and I’m in awe of your potential.

I see your struggle, and I know that, like a bird pecking out of an egg, the struggle will make you strong.

I see your choices, and I recognise how you are honouring your vision.

I see your joy as you courageously take one more step and learn a bit more about the markets.

I see your deep desire to do more, be more and have more.

I see a trader.

I see you.

Let's make 2016 a terrific year of triumph.” - Louise Bedford (Source: Tradinggame.com.au)


Source: www.tallinex.com

Tom Steyer: A Fund Manager Turned Activist

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 12

“If you see a strategy that has a good track record. This is not about a quick buck. It's not about one trade, or even one day. It's about putting your money into a strategy that has a track record, and sticking with it. Everyone has good days, weeks, and months... but there will be bad ones, too.” - Richard Mazur

Name: Tom Steyer
Date of birth: June 27, 1957
Nationality: American
Occupation: Fund manager, investor, activist

GREEN TRADES
Born in New York City, Tom’s father was a partner in a New York law firm, and his mother was a teacher of remedial reading at the Brooklyn House of Detention. He earned a BA from Yale University and an MBA from Stanford University.

Tom began his career at Morgan Stanley in 1979. From 1983 to 1985, he worked at Goldman Sachs.

Wikipedia says Tom is the founder and former Co-Senior Managing Partner of Farallon Capital Management, LLC (founded in 1986), and the co-founder of Beneficial State Bank, an Oakland-based community development bank… Since 1986, he has been a partner and member of the Executive Committee at Hellman & Friedman, a San Francisco-based $8 billion private equity firm. Farallon Capital Management, LLC, manages $20 billion in capital for institutions and high-net-worth individuals. The firm’s institutional investors are primarily college endowments and foundations.

In spite of inevitable negativity, Tom firm’s positions were mostly green, and he grew richer and richer over time. As of March 2014, Tom was worth $1.6 billion

Tom’s married to Kathryn Ann Taylor and they’ve 4 children. He’s now very active as a philanthropist; and an environmentalist, being a democrat.

He and his wife have pledged to give half their wealth to charity.

What You Need to Know:
1. After attaining some professional experience, Tom founded Farallon Capital Management, LLC, in January 1986 and co-managed its portfolios. You see, it takes time to become truly financial independent. Trading isn’t a get-rich-quick scheme, for it takes Tom 26 years to arrive where he’s today. Those who look for ways to become rich quickly are in for heavy losses and heartaches. Grow rich slowly, not quickly.

2. Farallon, which employs about 165 people in 8 global offices, and is headquartered in San Francisco, California, has one noble goal: Absolute return investing, which is a strategy that aims to produce a positive absolute return regardless of the directions of financial markets. What a great example for traders? We want to make money regardless of the direction of the market!

3. How does Farallon achieve their aim of making money irrespective of what the markets do? Well, they make credit investments, value investments, merger arbitrage, real estate-related investments and direct investments. They also invest in public and private debt and equity securities, and direct investments in private companies and real estate

4. It’s a pity that too many people only have short stints at trading. They trade for a few days or a few weeks or a few months or a few years; and then quit forever. For Tom, this is different, his trading career spans more than 3 decades.

5. When you become financially free, you can then devote your time and life to what you really like (your passions). Steyer announced in October 2012 that he would be stepping down from his position at Farallon in order to focus on political activism. What would you like to do after you become rich?

Conclusion: One wise forumer says he used to get disappointed, but he learned to accept reality as part of things. Now he’s always happy because he’s no expectations and this has made his performance grow as well. He believes working without expectation is probably the best thing and makes trading so much easy to do, but of course, he remembers to set line between no expectation and being careless. He doesn’t expect much from himself as he goes with the flow of the market.

This article is ended with this quote:

“I believe my work right now should not be in our nation's capitol but here at home in California, and in states around the country where we can make a difference.”
– Tom Steyer


Source: www.tallinex.com

Comparing Trading to Traditional Work

When new traders move into the arena of trading they face several functional difficulties such as how do markets work, what are the subtle difference between markets and most importantly how does one design and implement a system that is some way logic and effective.

If someone manages to navigate this maze and become in some way successful at this game then they face another issue, one of identity. In the Western world our work defines us – the most common introductory question one is asked is – what do you do? This question whilst seemingly innocuous is actually very powerful within our society since it conveys what your background is, your education, life experience, who you might associate with and often where you might live. Even the way our names are arranged was originally a reflection of our occupation.

Hereditary surnames where uncommon in the Western world until around 13th or 14th century – they were called by names and they either reflected where you were from or your occupation. This is an obvious means of distinguishing between members of a growing population and these names are still with us today. It takes very little imagination to understand the etymology of names such as Mason, Smith or Baker.

It is not too much of a stretch to say that work defines us and contributes immensely to our sense of self-worth. The devastating effects on unemployment are testament to how much of purpose we derive from the notion of work. Without a sense of work or collective striving – which is largely what working in a group is we struggle with a lack of belonging. When you become a trader this traditional sense of work is lost to you as is some part of your old identity.

Traders therefore have to establish a new sense of authenticity about themselves based around what they now do – not what they used to do. This also has to somehow be communicated to others, although I have often found this to be less successful than I would have hoped. Family members will often simply not understand what you do or what you are hoping to do with your life since our roles are very nontraditional.

Intimately linked to this notion of work as a mechanism of generating a sense of self-worth is the allied idea of a work ethic. Various religious traditions have the notion of a work ethic. You are rewarded for the amount of effort you put into something, the notion being the harder you work the more you earn. In trading this is not true, in fact there is a lot of evidence to the contrary, the more you try and trade the less you often make. It is quite possible as a trader to work at a constant level but to see you payoff swing wildly throughout the year.

It is not uncommon to work at the same rate throughout the year and to have made little or no money for 11 months and then make it all in the last month of the year. This unfortunately is part of the game – if you have a methodology that is statistically sound what you do in a simplistic sense has little to do with what you earn. This is extremely difficult for many, particularly those who are weeded to both a notion of a work ethic and a regular pay cheque.

However, there is an upside in this. You can create whatever role for yourself that you want but this is difficult since many derive their sense of self from the reflection they see in others. If you can move beyond this then you can define your life as being whatever you want it to be. And like me when travelling internationally you can on immigration forms write your occupation as Rodeo Clown and no one is any the wiser.

Author: Chris Tate


Article reproduced with kind permission of Tradinggame.com.au

NB: For best kept trading secrets, please visit: http://tradinggame.com.au/


www.tallinex.com wants you to make money from the markets.

William Gann: An Accurate Market Forecaster

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 13

“Writing down a trading plan and sticking to it is the winning trader's secret weapon. If you create detailed trading plans and manage risk, you will increase your chances of success. Don't think you need to trade by the seat of your pants. Take things slowly. Map out your trading plan, and follow it. You will trade more calmly, creatively, and profitably.” – Joe Ross

Name: William Gann
Nationality: American
Date of Birth: June 6, 1878
Occupation: Trader, technical analyst and market forecaster

A HIGHLY SPIRITUAL TRADER
William’s dad was a cotton farmer.

He started trading in 1902 when he was 24. He developed and used the technical analysis tools known as Gann angles, Square of 9, Hexagon, Circle of 360 (these are Master charts). Gann market forecasting methods are based on geometry, astronomy and astrology, and ancient mathematics.

William was highly spiritual. Wikipedia says he was believed to be a religious man by nature who believed in religious as well as scientific value of Bible as the greatest book ever written. This can be repeatedly observed in his books. He was also a 33rd degree Freemason of the Scottish Rite Order, to which some have attributed his knowledge of ancient mathematics, though he was also known to have studied the ancient Greek and Egyptian cultures.

You would need to do your own research to know how Gann angles work. He made profits by his own speculative efforts. He profits were real and his forecasts were accurate.

William died on June 18, 1955.

What You Need to Know:
What you need to know about Williams was revealed by Justin Kuepper (Source: Trade2win.com) in his article of March 18, 2016. These are adapted excerpts from Justin’s article.

1. Predicting the future is impossible, right? If William Gann were around today, he’d beg to differ. His first prophecy is believed to have happened during World War I when he predicted the November 9, 1918, abdication of the Kaiser and the end of the war. Then in 1927, he wrote a book entitled "Tunnel Through The Air," which many believe predicted the Japanese attack on Pearl Harbor, and the air war between the two countries.

2. William’s financial predictions were perhaps even more profound. In early 1929, he predicted that the markets would probably continue to rally on speculation and hit new highs… until early April. In his publication, The Supply and Demand Letter, he delivered daily financial forecasts focusing on both the stock and commodity markets. As this daily financial publication gained notoriety, William published several books - most notably "Truth", which was hailed by the Wall Street Journal as his best work. Finally, he began releasing the techniques that he used to make these forecasts: the Gann studies.

3. Did he produce any results? In 1908, William discovered what he called the "market time factor," which made him one of the pioneers of technical analysis. To test his new strategy, he opened one account with $300 and one with $150. It turned out to be wildly successful: William was able to make $25,000 profit with his $300 account in only three months; meanwhile, he made $12,000 profit with his $150 account in only 30 days! After his results were verified, he became famous on Wall Street as one of the best forecasters of all time.

In his article on Trade2win.com, Justin Kuepper concludes:
Is it possible to predict the future? W.D. Gann probably thought so, and seemingly proved it with his wildly successful returns. The system is relatively simple to use, but difficult to master. After all, it was Gann's uncanny ability to fine-tune his techniques that led him to enormous profits - the average investor is not likely to obtain these kinds of returns. Like many technical tools, Gann angles are best used in conjunction with other tools to predict price movements and profit.

This piece is ended by the quote below:

“Even though I'm young by many people's standards (28 years old this April), I feel like an old soul when it comes to trading. I've already been through many stressful high-volatility periods (9/11, the 2000-2002 market collapse, the 2008 Subprime Crisis, the Euro Crisis and the Flash Crash in 2010, the Chinese stock market crash in 2015... and many others). I think these experiences help me today to remain calm and cool-headed in difficult situations. ” - William Gandini (Source: Collective2.com)


Source: www.tallinex.com


What Super Traders Don’t Want You to Know: http://www.advfnbooks.com/books/supertraders/index.html

Super Trading Strategies

“One of the best ways to learn about anything is to read about it. Books, articles. Even just marketing pages. Find out what the pros are doing. Find out what's working for them. And then…” – James Altucher

In the last few years I have written three books titled Lessons from Expert Traders (published by Harriman House, May 2013), Learn from the Generals of the Markets (published by ADVFN, May 2014) and What Super Traders Don’t Want You to Know (also published by ADVFN, March 2015).

The books profile the best traders and investors in the world – dead and alive. We reveal their stories, trading/investing styles and approaches, plus other things they think and do differently to make them stand out in this extremely competitive, but lucrative industry. The books contain invaluable lessons and secrets that can be used by speculators to bolster their mindset and career in an uncertain world of trading.

However, certain readers leave negative reviews (which are normal and deeply appreciated). The biggest reason for most of the negative reviews is that readers who bought the books hoped to find concrete and easy-to-use trading strategies, which are not in the books. Although the books contain tips and tricks that can be used to improve your trading, I think readers also need specific trading methods they can use to tackle the markets.


Some of the best trading strategies and methods on this planet can be found in TRADERS’ magazine. I have been writing strategies for them for 6 years. In the past, I tended to ignore requests for strategies, but I have our readers’ best interests in heart, so I decided to find a way to write a book about strategies.

I approached TRADERS’ and requested their permission to reproduce some of the strategies I had written for past issues of TRADERS’ magazine. This book is now available only because TRADERS’ was kind enough to allow us to reproduce some of the strategies. If you use the strategies you are expected to make average gains that are bigger than average losses over time.
This book contains ten selected strategies for winning the battles on Forex markets. Some of them are also great for the stock and futures markets. You can even try some of them on simulation accounts for a few months, just to see how useful they are.

I have had trainees and clients who have applied some of these trading strategies and made decent profits with them. I have personally seen students, trainees, clients and other traders who have been making decent money from the strategies in this book. You too can make decent gains by using the strategies as they were supposed to be used.

Conclusion: There are short-term, swing and positions trading strategies in the book. Some are good for part-time traders and some for full-time traders. Simply study the book and choose a strategy that fits you. I would be happy to hear your testimonies as you use one of these strategies to tackle the markets victoriously.

This article is ended with the quote below:

“For example, think about becoming a Super Trader — and let’s say you could consistently make 2% (or more) in the market each month no matter what the market type was. Think about how that would feel.” – Dr. Van Tharp

Source: www.tallinex.com

Super Trading Strategies: http://www.advfnbooks.com/books/supertradingstrategies/index.html

Jerry Parker: The Most Successful of Turtle Traders

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 14

“My advice to… both strategy creators and investors — is to always have a ‘what-if’ plan. Always know what you're going to do, when the unlikely or unexpected event occurs. You can't anticipate everything in advance, of course — not specifically — but you can generally know in advance how you will handle surprises when they occur. My advice is to be ready for surprises, because they will happen, sooner or later.” - William Gandini (Source: Collective2.com)

Name: Jerry Parker
Nationality: American
Occupation: Trader and portfolios manager
Website: Chesapeakecapital.com

TRAINED TO BE A SUPER TRADER
Jerry was one of the original Turtles trained by Richard Dennis. He’s also the most successful of the Turtles, given his performances in the past and recent times. He’s one of the most successful speculators in the trading industry.

When he finished his stint with Richard, he founded his own funds management business, named Chesapeake Capital Corporation.

According to the firm’s website, Chesapeake Capital Corporation was founded in 1988. With over 26 years of managing client capital, they are focused, consistent and single-minded in their approach. Chesapeake provides investors uncorrelated returns through consistency in approach across a broad range of global markets and variable market conditions.

The firm is regulated in the U.S. by the Commodity Futures Trading Commission as a Commodity Trading Advisor and Commodity Pool Operator and by the Securities and Exchange Commission as an Investment Adviser.

Jerry’s been interviewed on numerous occasions.

What You Need to Know:
1. Intelligence alone isn’t enough for trading success. Though a trader may be brilliant, but a high IQ isn’t enough for success, otherwise big companies (like Enron) wouldn’t have crashed as a result of numerous Ivy League schools graduates that were working for them. After all, there are hugely successful companies in the world, whose founders and CEOs aren’t from top schools. It turns out that most successful CEOs attended lesser-known schools. Jerry is quoted as saying: “The Ivies and other A-league schools have a lot of prestige because they’re supposed to open doors and lead to successful careers. But parents who expect the Ivies to ensure their kids’ success are going to be disappointed. The old-boy network isn’t much good in an economy like this. It’s competence that counts.”

2. Trading success is beyond intelligence: What makes Jerry Parker to have had good performance for nearly 3 decades is more than intelligence. When he was a trainee with Dennis, some of his colleagues failed at trading and some of them succeeded at trading. For example, David Ricardo advised many, many years ago, that losses should be cut and profits should be run. This working principle, doesn’t require any intelligence, and it works till tomorrow.

3. Yes, the Turtles, including Jerry, were given trading rules. They treated trading as business. You need trading rules and you need to treat your trading as business.

4. After you get trained for trading, you’ll need to answer for yourself as to whether or not you’ve the ability to succeed on your own. You success has to do with how well you employ principles that work for you. You need to believe you’d make it, and you must be willing to do what would help you.

5. “You’d to be really smart to be hired by Dennis,” says Jerry. Dennis earned $80 million in 1986, but some people thought they couldn’t achieve that. The Turtles were lucky to be trained by a great trader. If you come across a professional who’d help, you’re lucky.

6. Trading competence is not easy to acquire, according to Jerry. He further says: “Trading for the rich, you got in at 7 a.m. and at 2 p.m. you watched the Cubs game.” But once he became a money manager for clients he’d to raise money, hire people, do research, track his performance, and trade. “The degree to which you are successful will be partly because of your buys and sells. But you’re also running a business: hiring, making sure you have good accounting and legal and marketing systems in place.” He said.

7. Jerry’s success is also made possible by other factors, apart from Richard Dennis. Part of those factors are some helpful books on trading, which Jerry cherished.

This article is ended with this quote from Jerry:

“An honest, humble mentor is the best thing going. Learn from other people. Do the right thing every day, focus on what you’re doing, and let the cards fall where they may.”

Source: www.tallinex.com

Honestly, this is a cache of trading wisdom - a treasure. Many people on Nairaland should come here if they need to know the truth about online trading. Free of charge, it is.

There Is Something Intriguing About Trading

“In my experience trading takes a very important and somewhat rare personality trait which is: the ability to see the next logical step and to then get it done. If this ability is lacking you will always be behind.” – Garachen (Source: Elitetrader)

Why Is Trading a Good Money-making Vehicle?
It’s a level playing field. Everybody is welcome.
You don’t have a boss to control you.
You need only a PC and Internet connection.
You can make money whether the market goes up or down.
The more experience you’ve, the better you become.
The starting capital is minimal.
You’ve great money management flexibility. You stay in control.
You choose when to trade and when not to trade.
Profits come naturally when you’re away from your system.
You can coach others including your family members.

There Is Something Intriguing About Trading
Most members of the public don’t believe they can trade successfully. They’ve been convinced that they can only give their money to professional funds managers to manage, without knowing that they can do this themselves. Your parents don’t have trading secrets to give you. Your school doesn’t have trading secrets to give you. The society don’t have the secrets to give you.

While there are pros who can manage your money successfully, it’s true that when you’ve correct trading methodologies and use them faithfully, you can even do better than the so-called pros in terms of percentage returns.

Forex trading is a good business, but many people don’t understand it. It’s controversial because the public opinions about it are unfair and warped. Most members of the public understand other types of business, save Forex.

There are ways to make small and consistent profits on monthly basis, which become considerable on annual basis. Since most people don’t have experience and others around them don’t have the knowledge, they’re afraid to get in. The reality is; successful traders are just normal people like me and you.

There are good trading systems you can use to make money, and those who use these systems aren’t smarter or better than you in any way. The only difference is that those who use good trading systems have the willingness to attain riches through discipline.


Conclusion: Trading is different from investing. As a trader, you buy and sell within days or weeks, but an investor may hold a position for months or years. The greatest market speculators are faithful to strategies that give them an edge. They stick to those strategies when they work and when they don’t work. I pray that your fortitude will not be shaken in trying times. Your true trading potential lies beyond your innate gifts.

The article is concluded by this quote:

“Trading is not a sin, but trading without knowing what you are doing can lead to a lot of problems. Trading, in and of itself, is not considered as gambling…. However, gambling is considered to be foolish. Trading without adequate knowledge of the markets and self is foolish because, by doing so, you are gambling… There is a certain amount of self-knowledge needed to choose the proper trading method.” – Andy Jordan

Source: www.tallinex.com

Tom Baldwin: A Market Force to Reckon With

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 15

“It seems that these days few traders are interested in trading long-term. The monthly and weekly charts remain relatively unnoticed. Traders are so busy looking at anything and everything from 60 minutes down to 1 minute, that they let beautiful trades slip right by them in the very markets where they are trying so desperately to make a buck… Please keep in mind that the moves you will be seeing are huge on the monthly and weekly charts; and if they last for only a few bars, which is many times better than the moves you are getting on intraday charts.” – Joe Ross (Tradingeducators.com)

Name: Tom Baldwin
Nationality: American
Occupation: Trader/investor
Company: Baldwin Group of Companies

A TRADER WHO CAN SINGLE-HANDEDLY MOVE THE TREASURY BOND MARKET
Tom took a Master’s degree in agribusiness and worked as a meat packer in Ohio. He’d already taken a few trading-related courses at graduate school, based on a friend’s advice, he moved to Chicago.

Being a trader and investor, Tom founded the Baldwin Group of companies. He traded the 30-year bond, and he’s recognized as a force to reckon with. He currently serves as Chairman of Baldwin Group Ltd., the parent company of several investment and financial services. Companies in the group include: Baldwin Commodities Corp., a Treasury Bond Futures proprietary trading company, and Baldwin Managed Futures, a CTA.

Tom’s career as a trader was a profitable one. Wikipedia say he is also the current owner of Granot Loma, the great American castle on the southern shore of Lake Superior in Marquette County, Michigan.

He was inducted into the Futures Hall of Fame in 2009, which was instituted in the year 2005 to honor exceptional contributions to the global futures and options community.

What You Need to Know:
1. Tom followed this trend. Period.

2. Trading is a lot of hard work, for one. It’s perseverance. You have to love to do it. Also, in your business, you have to have a total disregard for money. You can’t trade for money. You shouldn’t make money your number one goal in trading.

3. As far as trading is concerned, patience is a virtue. Some people trade too much. They just enter the markets at random and trade anything that moves. So they’ll be forcing trades rather than waiting patiently for their setups to form. Patience is an important trait many people don’t have. Tom believes that patience has been the most difficult thing for him to work on. Although he’s made great strides in the past two years, he still catches himself worrying that the next bull market is going to take off without him. He expects to continue to improve in this area as he continues to gain more experience.

4. Education doesn’t necessarily make you a great trader. Some newbies think the more they know, the better it is. But being smarter can also mean being dumber. More knowledge could make your trading results worse, because what you need to be profitable are simple principles. Many great traders believe that there isn’t anything special about them. They just show up to work everyday and study their asses off.

5. Tom said trading is like any other job. You work hard, put in the time and effort, and make your own luck.

6. For a successful trader, the ego has been put under control. They find it very easy to cut their losses. You don’t need to be self-confident that all trades must go in your favor. Tom has come a long way with this as well, of course, with having a few big winners under his belt would really aid his psychology.

This article is ended with the quote below.

“Actually, the best traders have no ego. To be a great trader, you have to have a big enough ego only in the sense that you have confidence in yourself. You cannot let ego get in the way of a trade that is a loser; you have to swallow your pride and get out.”


Source: www.tallinex.com

Currency Strength Meter (Leaked)

TAPPING PROFITS WITH AN INTRADAY STRATEGY

“As traders, we should never stop learning, because the markets are never going to stop teaching. Continuing to learn is a vital part of becoming a better trader.” – Track ‘n Trade

You may have heard that FX trading is all about combining strong currencies with weak currencies. Well, this is the home truth. In fact, this is what currency trading is all about, and the Currency Strength Meter helps us do this as easily as possible, while you are adequately rewarded.

Currency Strength Meter – What You Need to Know
The currency strength meter at LiveCharts gives you a quick visual guide to which currencies are currently strong, and which ones are weak. The meter measures the strength of all Forex cross pairs and applies calculations on them to determine the overall strength for each individual currency.

How Does The Currency Strength Meter Work?
The meter takes readings from every Forex pair over the last 24 hours, and applies calculations to each. It then bundles together each the associated pairs to an individual currency (eg, EURUSD, EURJPY, EURGBP etc) and finds the current strength.

How Can This Help Me?
It is useful as a quick guide to which currencies you might want to trade, and which might be worth staying away from. For instance, if a certain currency is very strong, and another suddenly turns weaker, you may find a trading opportunity. Such deviation between pairs usually indicates momentum. Conversely, if two currencies are weak, strong or average strength, there is often a range or sideways movement happening. You might want to stay away from trading those pairs. (Source: LiveCharts)

Bringing It Together
There are many ways in which currency strength information is displayed (like figures display, bars displays, etc.), but LiveCharts makes uses of rectangular bars.

The strongest currency would display six rectangular bars on top of it.
The weakest currency would display only one rectangular bar on top of it.
The second strongest currency would display five rectangular bars on top of it.
The second weakest currency would display two rectangular bars on top of it.
The uppermost rectangular bar on top of the strongest currency is green, while the only rectangular bar above the weakest currency is red.

Watch the video here: https://learn.tradimo.com/courses/183

Looking at the CSM, the best thing to do is to combine the strongest currency with the weakest currency for the best result. Sometimes, we may combine the strongest currency with the second weakest currency (or the second strongest currency to the weakest currency).

In a given day, all currencies with four or three bars on top of them would be avoided.
Also, these are what we do not want to do:
Combination of one strongest currency with another strongest currency,
Combination of the weakest currency with another weakest currency,
Combination of one second strongest currency with another second strongest currency,
And combination of one second weakest currency with another second weakest currency.

Strategy Snapshot*
Strategy name:
Strategy type:
Suitability:
Time horizon:
Indicator:
Setup:
Position sizing:
Stop loss:
Take profit:
Risk per trade:
Risk-to-reward ratio:
Maximum duration per trade:
Maximum orders per day:

The quote below ends the article:

“When I follow my rules, good things happen. When I don't follow them, bad things happen.” - James Altucher

*Please watch the details of the strategy video here: https://learn.tradimo.com/courses/183


www.tallinex.com wants you to make money from the markets

Noam Gottesman: Founder of a Successful Trading Business

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 16

“Traditional risk management simply fails to account for the fact that the most dangerous risks are those which occur infrequently and don’t show up in track-records.” - Jack Schwager

Name: Noam Gottesman
Year of birth: May 1961
Nationality: American, British
Occupation: hedge fund manager, businessman

HE APPROACHES TRADING AS A BUSINESS
Noam is of Jewish ethnicity. He also has dual citizenship (the US and UK); and based in New York. He got his B.A. from Columbia University.

He first worked at Goldman Sachs, in a London branch, and rose up the executive ladder, becoming a manager of one of their private client funds. After leaving Goldman Sachs in 1995, he co-founded GLG Partners.

As of year 2014, Noam was worth $2 billion, which made Forbes list him among 400 richest people in that year. This means that his trading activities were hugely profitable.

In 2007, GLG Partners grew up to the point of managing $24.6 billion; and becoming a publicly traded company on New York Stock Exchange.

Noam has other business and activities of interest like, TOMS Capital (investment Company), Eleven Madison Park (restaurants), the Tate Gallery Foundation (trusteeship), etc. He was blessed with 4 children.

What You Need to Know:
1. Contrary to what certain people believe, trading is no gambling. Well, it’s gambling for those who see it as such. For those who see it as a serious business, like Noam, it’s just what it is: a business. Treat your trading career as a business and you’d have higher chances of being successful.

2. You track record is important. It shows how you controlled risk in the past and profited from uncertainties. Noam has his track records, making him an undisputed super trader.

3. Your trading system(s) must be able to survive all market conditions, and you must be able to follow your rules flawlessly. By this, I mean winning rules. Adhering to losing rules would only make you lose your money.

4. Yes, when you become successful in trading, you can also try other businesses, just like Noam. Breakthrough in a very tough but highly rewarding business like trading might encourage you to venture into other fields. Peter Thiel is another good example.

5. As you become richer, then enjoy your money. Forbes revealed that Noam got married in May 2015 (second marriage) to the sales director of fashion label Reed Krakoff in Italy, an elaborate event attended by such celebrities as Beyonce and Jay Z.

This article is ended by the quote below:

“A mistake occurs when you don’t follow your written trading rules, and if you don’t have written rules then everything you do is a mistake. An efficiency level of 80% (two mistakes in ten trades) can ruin your trading system and your profits.” – Dr. Van Tharp

Source: www.tallinex.com

5 Ways To Make Money From The Markets Without Capital

“Once you get your trading plan completed however, and you have a successful track record of six months of solid trading results, lock that plan up and never share it with anyone. Use it to build an incredible life for you and your family. Hold on to the edge you have worked so hard to attain. Be happy to share your knowledge but that does not have to mean giving away your strategy and edge.” – Sam Seiden

There are certain other ways through which you can make money from the markets without your own capital, and that’s what this article reveals.

Many people are eager to commit real money to trading; which is not a bad thing. However, the most crucial thing is correct trading knowledge. When you’ve correct trading knowledge, capital will come looking for you, which means that your knowledge makes you rich. If you’ve capital and you don’t have the right knowledge, you’ll soon be done away with your capital.

When you’ve the right knowledge and no capital, these are what you can do to become rich gradually as a trader:

You can work as a signals provider: If you’ve a good trading idea or strategy, you may want to become a trading signals provider at one of relevant websites like Zulutrade. Registration and services are free, and you can trade Forex, CFD and Binary Options. Once you use a positive expectancy system with sensible risk control tools, you’ll begin to gain live followers. You then get paid a percentage of the trading volume generated by trades that get opened as people copy your trades automatically.

You can get investors through proven demo track records: This is possible on relevant websites like Myfxbook.com. You can open a demo account with a good MT4 broker and register the account on Myfxbook. Your trades are recorded and analyzed automatically. After many months or a few years of positive track records (clean survival), you might convince an investor (or investors) to commit some capital to you. You then get some percentage of profits you make on that capital. I know someone who got employed as a trader in a reputable bank – only because he’d a demo account that showed good results of a few years.

You can get money by joining demo trading competitions: Luckily, many brokers organize forex trading competitions with various awards methods. Some brokers would give you a cash prize for being one of the top winners and a contract to manage money for them. Some brokers would give you a free deposit as one of the winners. You can’t withdraw the deposit, but you can withdraw the profits made on it. Some brokers can allow you to withdraw the money from your MT4 account once certain conditions have been met; like trading with some desired volume. Recently, Tallinex.com organized a demo trading competition, in which 15 winners were given generous cash prizes, which could be withdrawn immediately or traded as each winner liked.

You can make money as an IB: I wouldn’t expatiate on this. Please ask your broker who an IB is and what the rewards for a successful IB are.

When you get some money, you can provide automated trading signals with real money on some relevant websites like Collective2. People who find your trades useful would gladly pay monthly fees for the use your strategy.

There are other ways to make money from trading related activities, without having your own capital. Can you think of some more of them?

When you’ve a proven strategy, the best thing is to trade it with real money. Some people don’t have money to open a decent trading account and they got talent as traders. Once they can prove their expertise in a simulation mode, they might get seed money to start their own trading business.

I know that some negative views people have about trading are simply not true.

Conclusion: Visionaries can’t be intimidated by the markets…. Schools don’t make successful people; learning makes successful people… You’ve to be different before you can make a difference.

I wish you a profitable trading future.

This article is ended by the quote below:

“But truth is… We all have losing trades..., as we all have winning trades. We all have good days..., and bad. We all.., are only as good - as how we managed the last trade - regardless of that trade's outcome. Trading is not about the amount - it only about the process..., routine..., making a plan for each trade..., then trading that plan to fruition. It’s about discipline...., patience..., repetitiveness..., with no opinion..., and one's ego set aside low..., it about self-management in a totally uncertain environment” – Redneck (Source: Elitetrader.com)


Source: www.tallinex.com

Paul Singer: A Very Smart and Tough Money Manager

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 17

“You actually know less than you think you do. I found this fascinating and it had me drawing bikes on a blank piece of paper. The central issue is that we actually know less about the world than we think we do. These errors abound in simple tasks and in our understanding of the way the world works. It is natural therefore that such errors creep into the way we think the market works and the way it actually does work. More importantly such errors will creep into the way we think we operate and the way we think we operate in concert with the market.” – Chris Tate (Source: Tradinggame.com.au)

Name: Paul Singer
Nationality: American
Date of birth: August 22, 1944
Occupation: Hedge fund manager, activist investor, and philanthropist

VULTURE CAPITALIST
Paul was raised by Jews; a pharmacist and a homemaker. In year 1966, he got his B.S. in psychology from the University of Rochester; plus a J.D. from Harvard Law School in 1969. He then worked as an attorney in the real estate division of an investment bank.

The hedge fund he founded - Elliott Management Corporation (EMC) – engages in distressed debt acquisitions. He’s also the founder and CEO of NML Capital Limited, based in Cayman Islands. Hi firms have more than $27 billion in AUM.

Paul has been called one of the smartest and toughest money managers in the money management industry. He’s also called a “vulture capitalist.” His hedge fund is seen as a vulture fund. Wikipedia describes a vulture fund as a hedge fund or private equity fund that invests in debt considered to be very weak or in default, known as distressed securities. Investors in the fund profit by buying debt at a discounted price on a secondary market and then using numerous methods to gain a larger amount than the purchasing price. Debtors include companies, countries, and individuals.

He started purchasing sovereign debt from nations in crisis, like Argentina, Peru, Congo-Brazzaville (through various means). When a country is in financial trouble, he would purchase some of their debt, making millions of dollars in interest repayments and fees on the original debt" when the countries stabilize.

As of August 2015, Paul was worth $2.1 billion. A generous giver, he’s supported many causes, including entrepreneurial, educational, Jewish, political, sexuality, etc. causes.

Paul’s blessed with two children; and he’s been divorced since 1996.

What You Need to Know:
1. When professional speculators speak, we should listen. They’ve learned how to take advantage of the unpredictability of the markets. According to Wikipedia, hedge fund manager Jim Chanos stated in an August 2009 radio interview that he and Paul had met with G7 finance ministers in 2007 to warn them that the global financial system was increasingly unstable and approaching a catastrophe, with banks on the verge of sinking the global economy. The pair argued that decisive action was called for, but Chanos claimed they were met with indifference

2. Your past failure or disappointment can give you energy and motivation to move on to success. Paul suffered certain losses early in his career, which led to risk aversion that still guides his investing today. He never risks too much per position. He trades with caution.

3. A good strategy will have very few losing years (if any). Paul’s Elliott Management Corporation had only 2 losing years since 1977. Even in 2011, when most money managers lost, his fund rose 4.2%. Wasn’t that impressive? From 1977 to 2008, the fund had an average of 14.7% returns per year, beating the S&P 500. You don’t need to double your account every year to be called “successful.”

4. Paul himself says successful hedge funds will be entrepreneurial; it is the essence of the craft. He prefers situations, all else being equal, that are dependent in large part on their individual efforts, as opposed to those that are dependent solely upon market forces. Some added feathers to their caps and some had their businesses shattered.

Conclusion: Normally, the bigger you stake, the more your gains, but the more your losses as well (in case things go wrong). What master traders and newbies must agree on, is that dealing with uncertainties and uncertainties themselves aren’t a bad thing. You may face uncertainties with informed decision, win and then look for next opportunities in uncertain markets. Some also face uncertainties with the gambler’s fallacy – which is normally dangerous.

This piece is ended with a quote from Paul:

“The recent trading environment has felt something like walking into a place and having a sense that something is wrong and dangerous but not knowing exactly what will happen or when. “QE Infinity” has so distorted the prices of stocks and bonds that nobody can possibly determine what the investing landscape would look like, or what the condition of the economy and financial system would be, in the absence of Fed bond-buying.”


Source: www.tallinex.com

The Best Time to Become a Trader

Soon, though, I became aware that there was an even bigger game available to players like me. It was, in fact, the biggest game in town -- the international financial markets. So my interest shifted from playing cards to playing the markets. - James Frazer

Someone in a West African country - a young man - had exhausted all means of getting a reliable livelihood, including hard manual labor. He resorted to commercial motorcycle riding. At least, he was able to get some money to feed his family.

One day, he’d a near fatal accident, and got confined to bed for weeks. I thought he’d never go back to commercial bike riding. I was wrong! Since he thought he’d no alternative, he went back to that job.

The young man went back to a job that nearly claimed his life because he’d no alternative; yet many quit trading because they lost negligible amount of money. People suffer ignominious defeat in other areas of their life and careers, and they don’t see any big deal in that. Nonetheless, they see a big deal in trading losses and they think there are better alternatives.

There are many people who tried to discourage me from trading when I started. These were people who were considered intelligent and successful in other fields, like religion, education, politics, etc.

For example, one respected religious man told me that he didn’t want to become a trader because he knew those who wanted to make heaven shouldn’t trade. What a totally wrong opinion about trading? That statement could discourage ignorant people from attaining their potential as traders. The man later sent me a personal email, asking me to remove him from my mailing list because he wasn’t a “businessman,” and he wasn’t interested in trading. I quickly removed him from my mailing list. He later blocked me on Facebook because he didn’t want to see some of my posts, which obviously related to trading.

I wasn’t deterred by his actions, for I knew his actions were also lined with envy. I knew he wasn’t the one to feed me or carry my responsibilities for me. He’d his own responsibilities and he’d even be glad if someone like me offered him some cash.

Years later, the same man was surprised that I’m still a trader, with a measure of success. I even sent him some money recently. He was grateful for the gift.

When Should You Become a Trader?
Now is the time for you to decide to become a trader. You chances of success are greater than you can imagine.

How can this be possible? I’ll reveal the secrets in my coming articles.

Most people come to trading as a last resort: When they’re completely down, when they’ve nothing to rely on and they’ve exhausted other possibilities. This is a wrong time to become a trader, since the financial pressure on you would make it impossible to trader with sane logic and rationality.

It’s better for you to become a trader when you’ve another sources of income. When you know that some initial challenges you encounter wouldn’t endanger your wellbeing (and perhaps, that of your family).

When you’re supported by your family, your life as a trader would become easier. Joe Ross, a trading veteran, once said his wife suggested that he write down what he knew about trading so that his children could learn in the event they ever wanted to take up trading. What he wrote at that time became his first book. Joe Ross clearly had support from his family. What a blessing!

Don’t Give Up Trying to Become a Successful Trader
Several years ago, when I encountered initial challenges in trading, I was tempted to give up. However, I was lucky to come across some things that encouraged me to keep on going. I knew I’d no better alternatives than trading. Now I’m happy to be a trader. I can only look forward to a brighter future.

Trading success is sweet, liberating and enriching. There are numerous known and unknown traders all over the world, who make decent profits on monthly and annual basis. They won’t exchange this wonderful privilege for anything! By not giving up trying to become a successful trader, you’ll soon experience the joy of financial freedom that comes with trading.

Conclusion: Many a good trader has survived the point at which chicken-hearted people quit, and has been rewarded. If we also imitate such determined traders, we’d survive whatever the hurdles we come across and we’ll enjoy rewards greater than what people think we can enjoy.

This article is ended with the quote below:

“Roald Amundsen says: Adventure is merely bad planning. I have talked about Amundsen before and focused in particular about how his success as an explorer was a function of his obsessive planning. What strikes me about people who are successful in very difficult fields is that they all share similar traits, attributes or philosophies. Much the same could be said about traders and trading/. If you are find trading an adventure or it is exciting/stressful then you are most likely doing it incorrectly.” – Chris Tate (Source: Tradinggame.com.au)


Source: www.tallinex.com

Marc Lasry: Making Great Wealth from Taking Risks

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 18

“Get no joy, except a superficial joy, out of winning. Get no sadness, except a superficial sadness, out of losing. Get to the point where it must almost be an act on your part to be joyful or to be sad - and not the opposite, as it is with most traders. Always remember that your joy and sadness come from and with the most meaningful aspects of your life - family, friends, acts of giving and loving and creating. Not trading.” – Andy Jordan (Source: Tradingeducators.com)

Name: Marc Lasry
Nationality: Moroccan, American
Age: 56
Occupation: Investor, fund manager, co-owner of Milwaukee Bucks

HE EARNED AN INCOME OF $280 MILLION IN 2013
Marc was born in Morocco. His family moved to the U.S. when he was 7 years old. His dad was a computer programmer and his mom was a teacher.

He got his B.A from Clark University in 1981; plus a J.D. from New York Law School in 1984. He worked as a clerk while in law school. He then worked at Angel & Frankel, following his graduation.

In 1989, he and his sister, Sonia Gardner, founded Amroc Investments. Amroc Investments was founded with $100 million, purchasing and trading claims and bank debt held by vendors of bankrupt and/or distressed companies. In 1995, they founded Avenue Capital Group, investing $7 million of their own capital. His sister had often worked with him.

Their hedge fund grew to be as much as $11 billion in AUM. Marc was ranked one of the 25 highest-earning hedge fund managers in 2013, with total earnings of $280 million.

He became a co-owner of the NBA's Milwaukee Bucks after purchasing the team from Herb Kohl for $550 million. That was April 2014.

Marc lives in New York, USA. Being a generous giver, he’s donated to science, education and politics. He’s a lover of basketball, tennis and comics.

As of September 2015, he was worth $1.9 billion. He’s married to Cathy Cohen – they got 5 children.

What You Need to Know:
1. Marc was blessed to have a sister who supported him and worked along with him. Concerning this, Marc revealed that he with his sister Sonia Gardner, was a forerunner to Avenue Capital Group. It was just the two of them and a secretary when they started – they were both working 14-hour days, 7 days a week. They slowly built one of the largest private distressed debt brokerage firms that existed at the time, and expanded Amroc to more than 50 employees. At the same time, for five years, they also ran their own money, just his sister and him. What can you learn here? I became a trader because my uncle called me many years ago, asking me to go learn trading because it was popular then. Today, I’m grateful that he advised me to do this. Sometimes, a piece of advice may be worth more than millions of dollars.

2. When you work with, or along with professionals, your life is easier. For example, Elon Musk surrounds himself with professionals and that’s one of the reasons why he appears to know much. Surround yourself with professionals, even work with them, and the results would be satisfactory. Marc met exceptionally smart guys at Bass: David Bonderman, Jim Coulter, Tom Barrack, and many others. It was a phenomenal period, and he quickly realized he was dealing with guys who were off-the-wall smart and really good guys – nice, smart people.

3. Marc looks at himself as a value investor. Trying to constantly find mispriced investments and add value in a situation. For him, investing means having conviction in your work and companies where you invest, even when the Street has written them off.

4. There’s no need to be concerned about how good a setup is, but we want to be concerned about how we can be protected in case things go wrong.

5. Good traders make profits because they view trading, price, etc. differently than what most people see. When the market reacts in panic, the public know. However, good traders analyze the scenario, assess the pitfalls and take actions.

6. No-one is too big to fail. No trader can avoid losses. No-one is immune from risk. Everybody can make it in life.

7. When you leave what you think is the best job for you, you might discover trading to be better. You won’t regret being a trader.

8. Marc says, “We are constantly searching, trying to find value, typically in troubled companies. And then we try to buy those assets at a discount. In contrast, most investors try to find companies that have no problems. And, when companies have problems, people get nervous. We look at the world very differently than most investors.”

Conclusion: There are many advanced traders who focus on the process of trading instead of money. They approach trading as if approaching sports (and like martial arts). They know they should approach trading as experts tackle opponents in matches. We tend to think illogically when we trade, which isn’t a normal mindset for traders.

This article is ended with another quote from Marc:

“People think we got to $20 billion overnight, but it wasn’t as easy as it seems. We had the background. We had good returns. We had the infrastructure, and we had good people. And, importantly, we had high-quality, stable, long-term investors that allowed us to raise money in a difficult fundraising environment. We were also lucky that we were in the right place at the right time.”


Source: www.tallinex.com