| There are formulas for just about everything,but it | | | | side. |
| has been shown that the simpler theformula or | | | | Ask any full time professional and he willtell you if he |
| method of doing a particular taskthe better it works. | | | | is right 50% of the time heconsiders that to be |
| It has evolved down to | | | | phenomenal. When I was onthe floor I was only right |
| KISS - Keep It Simple Stupid. | | | | about 40% of thetime, even about 20% and wrong |
| This also applies to trading in the stockmarket. There | | | | about 40%. BUT |
| are literally hundreds offormulas, both technical and | | | | I made $3.00 for every dollar I lost. Smalllosses and |
| fundamental thatare easily available to investors. Each | | | | big winners are the key to success. |
| traderhas his own method he uses. Every | | | | This is the key to any profitable formula -keeping the |
| professionaltrader on the floor of the stock | | | | losses small. |
| exchange hashis own variation on some major | | | | When I see advertisements in the financialpapers for |
| provenformula. The more skilled he becomes with | | | | methods claiming to be right 80%, |
| itthe more he feels it is the best one. | | | | 90% of the time I cringe. It just can't be. |
| Sometimes it takes years for a trader tosettle on | | | | There is no trader I ever met who was thatgood |
| one method or group of methods thathe uses to | | | | and I have known some exceptionaltraders. |
| signal buys and sells. It took memany years to find | | | | The major text on technical analysis is |
| that technical group thatworked for me when I was | | | | "Technical Analysis of Stock Trends" by |
| an exchange member. | | | | Edwards and Magee now in the 17th printing ofthe |
| For some it evolves into long term tradingand for | | | | Fifth Edition that lists multitudes ofmethods. They all |
| others it can be buying and selling ina matter of | | | | work, but many arecomplicated. A magazine called |
| minutes. The time period is notimportant. The | | | | Futures Truthanalyses 200 commodity trading |
| method is. Even as a floortrader on the commodity | | | | systems in eachissue. Fundamental Theory is equally |
| exchange I had onlytwo criteria I watched before | | | | complex. |
| entering intoany position. | | | | There are software programs that allow theinvestors |
| All professional traders and investors areaware of the | | | | to enter as many as 30 parameters. |
| single most important fact andthat is how much I am | | | | The more complex it is the less chance it hasto |
| willing to lose before Iexit this new position. Every | | | | work. And the biggest obstacle to anyprogram is the |
| KISS formula hasan exit strategy. Every professional | | | | trader himself. He cannothesitate when a buy or sell |
| knows inadvance how much he will allow himself to | | | | signal is given. |
| loseif he is wrong. The professional does not seta | | | | Keep your formula simple and execute thesignals. |
| limit on the winning side of a trade only onthe losing | | | | You can be a winner. |