Showing posts with label 7. Books. Show all posts
Showing posts with label 7. Books. Show all posts

Monday, June 1, 2009

Millionaire Traders Part 14 - Getting Started In Trading

This is the final chapter of the book Millionaire Traders. There are some very simple and powerful facts that you need to know before trading.

1. Be well capitalized - The majority of business fail simply because they do not have enough money to survive the inevitable mistakes that befall all start ups. Money buys time and time turns into experience, which is the necessary ingredient to master any skill.

2. Expect to lose for at least six months - Learning to trade is like learning how to do many things in life such as riding a bike. Most probably everyone has fallen once or twice. This applies to trading where you don't expect to be successful from the start. You will make mistakes and probably blow up your first trading account. The difference between most new traders and pros is their perseverance. It is much easier to give up trading and move with our lives than to have the dedication to learn from our mistakes and ensure that we don't repeat them. Remember the initial starts up for the 12 star traders?

3. Test before you try - Testing every strategies before you trade live is so important for new traders that it deserve its own section. Review your charts to have a better understanding of how assets trades. Use multiple time frame to ensure more winning trades.

4. Always use stops - Use stop to protect capital. Most asset classes are trending, smart traders will realize that if they catch a breakout move, the move can last for a long time. The best way to take advantage of this dynamic is through the use of trailing stop .

5. Trade to your personality - People who need instant gratification are probably to find their best success focusing on shorter-terms trades. People who are patient and willing to sit with a trade for days or weeks at a time are best suited for long-term trading.

6. Tools of the trade -

A) Mechanical tools
- Good desktop computer with minimum 2GHz chip, IGB of Ram and 100GB hard drive.
- At least two 19-inch flat-panel monitor to view charts,price action, and various websites.
- Preferably two broadband connections (ie., both cable and DSL) to ensure redundancy.
- Speed-dail button on your phone to your broker in case all electronic systems go down and you need to liquidate your position manually.

B) Analytical tools
-Bloomberg and CNBC for latest news.
-DailyFX.com
-www.elitetrader.com

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Thursday, May 28, 2009

Millionaire Traders Part 13 - Steven Ickow



Almost 70 percent of trading on Nasdaq is now done through automated order-entry programs. Many traders have bemoaned the onset of computerized trading robots as the end of face-to-face markets, but Steven Ickow had not only adjusted but prospered under the new regime by probing out the logic behind the software algorithms.

Let's get some tips from Steven Ickow :

"At the beginning it was very hard because I couldn't figure it out. You'd feel a sense of failure, why can't I figure it out? And then it just clicked. I tell people that after six months you either get it or you won't."

"So I can tell people exactly what to do. But their emotions get the better of them. I have trained people who were good traders to become better trader."

Lastly, find the right instrument to trade and be very focus- forex, stocks, commodities, future index etc. Trading requires total dedication and complete commitment. Winning traders always have a crisp, clear and logical foundation for their trade.


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Monday, May 25, 2009

Millionaire Traders Part 12 - Marcelino Livian

Marcelino Livian has a amazing 80% return from the forex market in the last four years! However, the interesting aspect of his story is not his trading, but how trading has improved the bond within his family - all are forex trader!

Marcelino always look to get paid while holding his position. This is the reason he trades FX exclusively on the side of the carry, letting the positive interest rate differential between the currencies work to improve his average entry price while he waits for his trades to become profitable.

This idea is important even if you do no trade the way Livian does. If you hold too large a position and end up not having enough capital to sustain regular fluctuations, then you can be easily get stopped out by the short term market movements.
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Thursday, May 21, 2009

Millionaire Traders Part 11 - Paul Willette

Paul Willette moved into the toughest trading arena of all - the electronic stock index futures market - where high leverage and whipsaw volatility destroy even the most seasoned traders. Paul is a classic breakout trader where he will buy only after a new swing high. He will add trade to winners and get rid of the losers.

Good quotes from Paul :

"I don't try to pick exact tops and I don't try to pick exact bottoms ... I've gotten burned way too many times trying to pick tops and bottoms. I'd rather know where it's going. All I care about is where it's going."

"Yes. I played them all and I expect to win. I have high expectations of myself. I do get bummed out when I lose."

In the trading field, support from loved ones is the key to success. During a trade, he will maintains at least a partial position in the trade until there us a reversal in the trend. He will never overtrade and only puts himself only into the highest probability setups and at the same time keeps his transaction costs to a minimum.
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