| The ABC's of Stock Trading Success | | | | trade by the actions of the market, not by his |
| Stock trading success...why is it so elusive? | | | | fearful, emotional response to the actions of the |
| With all the trading information, systems, trading | | | | market. |
| advice and assistance available today, the fact that | | | | He started placing his stop loss orders in a position so |
| most people who attempt to profit from trading | | | | that the market had to change trend in order to |
| Stocks lose money seems quite bizarre. | | | | take him out of a trade. In other words, a logically |
| Can you imagine the millions of dollars that must have | | | | placed, technically correct stop loss position. |
| been spent by countless traders on courses and | | | | He then reduced his position size to allow for these |
| Stock analysis software, that was wasted because | | | | stop loss orders being further away from the price |
| the buyers didn't understand the key principle of | | | | action, so that his account was never at risk of being |
| trading success I am about to share with you now. | | | | totally wiped out by one serious loss. |
| We aren't going to need any charts for this | | | | He did a pre-trade and post trade analysis sheet, so |
| lesson...just your ability to comprehend the value of | | | | he could analyze his performance and try to |
| what I am about to share with you and your | | | | consistently improve his results. |
| willingness to take action - right now I want to share | | | | (This can be as simple as a sheet of paper where |
| with you the ABC's of trading success. | | | | you write down your order, the position of the |
| If trading was an easy business to master and | | | | market and your thoughts and feelings before, during |
| profits were freely available to all, every punter with | | | | and after a trade. |
| a computer and a free charting program would be a | | | | Or it can be an elaborate system of checks and |
| millionaire and the streets of our cities would be | | | | balances that guide you through each of your trades. |
| clogged with chauffer driven limousines. | | | | Be careful though - keep it simple or you probably |
| The fact that the majority of the population have no | | | | won't use it!) |
| idea how to make a buck from the Stock Market, | | | | Once he started to do this, he started to make |
| often after spending large amounts of money on | | | | money (with the exact system we have been |
| education and trading losses, made me wonder why | | | | teaching you on this Website). |
| this is so. | | | | (There are, of course, many other strategies and |
| I searched for the answer to profitable trading for | | | | systems you can use in addition to the lessons we |
| years, until I found it in an unexpected place, when I | | | | teach you to increase your profits, but to start with, |
| wasn't looking for it at all. | | | | these methods are all you really need to become a |
| You may be able to relate to this story, or you might | | | | profitable trader.) |
| just be starting out and this will help you to reduce | | | | We are always learning and improving - every trader |
| the time you spend in your initial learning stages and | | | | should strive to do this also. |
| speed up your path to profits. | | | | When you are making consistent profits using the |
| Let me tell you about Jim (not his real name...of | | | | methods we have shared with you, investigate some |
| course). Jim first started trading after answering an | | | | of these additional entry and exit techniques, but not |
| ad in the Brisbane Courier Mail for a popular trading | | | | at the start. Keep it simple. |
| education package that cost him around $1000. | | | | When he started to trade this way, he found it was |
| Little did he know that the fateful investment in that | | | | far better to take a small position with a loose stop |
| course would lead him into the abyss of Gann | | | | loss and be able to sleep at night, than his previous |
| analysis, and that it would eventually cost him | | | | strategy of using maximum leverage and stressing |
| thousands of dollars in courses and trading losses to | | | | out whenever he was in the market, to the point |
| pull himself out the other side. | | | | where he couldn't stand to walk away from his |
| He read the course, watched the videos, read the | | | | screen in case the position went against him. |
| course, watched the videos...you get the picture. | | | | This method sets up lots of profits and a few losses. |
| Losses, losses, small profit, losses. | | | | Much better than the alternative he had previously |
| He felt that because of his limited knowledge, he had | | | | used. |
| to learn more and more in order to stop the losses | | | | He then started looking for Stocks that trended |
| and to start profiting from the market. So he spent | | | | strongly for long periods of time, and was drawn to |
| more and more on courses - and his trading got | | | | the US Stock Market. |
| worse and worse. | | | | He used exactly the same entry and analysis |
| The more he learnt, the less he seemed to know | | | | techniques I have shown you on the Website, and - |
| and the worse his results became. | | | | He bought Call options in Gen Probe Inc (GPRO) with |
| Then, he finally learnt about the A, B, C triangle of | | | | the Stock at $27 and held on until the Stock price |
| success, in trading and in every other area of life, | | | | was $58 three months later. |
| from one of his property mentors - John Fitzgerald. | | | | He bought Pacificare Health Systems Call options |
| The A, B, C's stand for - | | | | (PHS) when it was trading at $24 and held them to |
| A - Awareness | | | | $51 four months later. |
| B - Belief | | | | And he bought Sandisc Corp Call options (SNDK) with |
| C - Conduct | | | | the Stock at $24 and held them to $58 less than |
| Awareness - He realised that he already did in fact | | | | four months later. |
| know enough to become a successful trader and | | | | (Please Note - these are not Stock |
| investor. He had studied many books and courses on | | | | recommendations, they are merely mentioned here |
| trading and had everything he needed in the way of | | | | for illustration and educational purposes and the |
| practical trading information to make a profit. | | | | trades are hypothetical examples). |
| He was aware of what it took to trade profitably. He | | | | Can you imagine the change in the size of his trading |
| could become a good, a great trader, if he could just | | | | account balance? |
| develop the second factor... | | | | None of these Stocks had given him any reason to |
| Belief - If he could bring himself to believe that he | | | | sell earlier, so he simply held on for the |
| was a good trader, he would become a good trader. | | | | ride...Awareness, Belief, Conduct...the success triangle. |
| He didn't need more knowledge at that time, | | | | The Awareness will come when you study and really |
| because he had a firm grasp of the basics. He simply | | | | 'get' the lessons on the Website and in the |
| had to believe in himself and his abilities and the | | | | Newsletter. |
| profits would follow. | | | | Study the lessons carefully, read books written by |
| The third leg of the success triangle | | | | the masters. Teach others what you have learned - |
| Conduct - Was were he was falling down. | | | | you will gain a better understanding yourself. |
| He would look at a chart of a Stock or market, and | | | | All human interaction is a chance to learn or to teach. |
| decide on a trading strategy using his understanding | | | | By teaching someone else and sharing your |
| of trends - he was calm, detached and unemotional - | | | | knowledge, you will learn any subject at a deeper |
| just like his written trading plan told him to be. | | | | level. |
| His success rate was good at finding profitable trades | | | | You ultimately go from an intellectual understanding |
| - but his conduct was the problem... | | | | to an emotional understanding (as Robert Allen calls |
| He had no trouble placing the trade while the market | | | | them, an aha!) of your chosen area of interest, in this |
| was closed. He would simply call his Broker and give | | | | case, profitable trading. Try it... |
| him the order. | | | | The Belief will come when you back test the Trading |
| Then, the market would open. His calm, detached, | | | | Plan I share with you on the Stocks that you want |
| unemotional state would turn into panic. | | | | to trade and prove to yourself that it does indeed |
| He would feel physically sick at times, scared in case | | | | work. |
| his analysis was wrong and he lost money on the | | | | Visualize yourself making a series of profitable trades. |
| trade. | | | | Feel how good it is to see the market moving in the |
| He honestly believed that he couldn't afford to lose | | | | direction you expected it to. |
| any money (the poor mans mindset) so he focused | | | | Imagine spending the profits you make trading |
| on losing. | | | | Stocks with your family and friends, and the time |
| He got what he focused on... | | | | you will have to do the things you want to do |
| He watched his trades like a hawk, and at the first | | | | instead of the things you have to do. Successful |
| sign of a reversal against his position, he would either | | | | trading gives you the 'time freedom' to do whatever |
| call his broker and exit the trade, or move his stop | | | | it is that you want to do with your life. |
| loss order to a place where he was virtually | | | | Do it first in your mind, and then do it in the market. |
| guaranteed of being knocked out by the normal | | | | Your Conduct - well that's up to you. Will you 'decide' |
| fluctuations of the market. | | | | to look at your written trading plan as your life raft? |
| He simply had too much leverage - he was over | | | | Cling to it as your last defense against the emotions |
| trading. | | | | of fear and greed that live inside each one of us? |
| He was continually setting himself up to fail. | | | | Will you trade with the trend, enter off 1 to 4 day |
| His conduct was the weak link in his trading success | | | | reactions to the main trend, reduce your leverage or |
| triangle. | | | | position size and put your stop loss orders out of the |
| Because he was continually losing money on his | | | | way, so the market has to change trend to get you? |
| trades, albeit only small amounts, his belief system | | | | If you do this, you should be confident that you can |
| started to falter, and he saw himself as a losing | | | | achieve trading success. That is our wish for you. |
| trader even more - then he started to think he had | | | | Good luck. |
| two weak sides on the success triangle - conduct | | | | Now, lets review today's lesson - |
| and belief. | | | | The Trading Success Triangle has as it's three sides - |
| He started to question the system he was using, | | | | Awareness, Belief and Conduct |
| which he had painstakingly back tested, over many | | | | If any of these elements are weak or missing, the |
| markets on hand drawn charts and knew was solid, | | | | triangle has no strength |
| but his failure to have control of his conduct or belief | | | | The sides are all important and are dependent on |
| made it look like it wasn't a good system at all. | | | | each other, but Conduct is the most difficult for the |
| So, how to fix it... | | | | average trader to master |
| He sat down and looked at his recent trading results, | | | | Fear and Greed act to change our conduct from |
| and noticed that on most occasions, if he had stayed | | | | what our rational thoughts tell us is the correct |
| in the trade, he would have made a profit. His | | | | course of action, to actions that aren't always in our |
| system was valid. His Awareness was enabling him to | | | | best interests. By controlling Fear and Greed, we can |
| find and execute profitable trades. | | | | make rational decisions that help us to become |
| His Belief system needed a gentle prod after several | | | | profitable traders |
| losing trades in a row, but because he had done so | | | | I hope this lesson has helped you in understanding |
| much study and work on back testing, he knew he | | | | the mindset of a successful trader a little better. |
| deserved to be successful. | | | | Understanding these three critical elements of trading |
| He started to visualise himself in his trading room, | | | | psychology will put you well on the way to a |
| making profitable, long term trades and enjoying the | | | | profitable trading career. |
| benefits that this type of trading would bring to | | | | Get this, and your trading success is practically |
| himself and his family. | | | | assured. Miss the lesson, and your chances of making |
| Then, he worked on his conduct. He again wrote out | | | | big money in the Stock Market are profoundly limited. |
| his trading plan, and decided that he would treat his | | | | Please feel free to share this lesson with your trading |
| plan like a shipwrecked sailor treats a life raft. | | | | friends and associates - they will thank you for it. |
| He would cling to it until he was forced out of a | | | | |