By Gavin M.
Let's take ourselves away from Greece for a moment because believe me, I am so fed up with hearing about that country. Let's talk about the Trader Life Cycle. This is a page from one of our classes that discusses the difference between a trader who goes at it on their own and one who chooses proper mentoring.
A number of firms out there with their actuaries have compiled enough statistics to show that over the last four decades, 90% of retail traders end up losing money. So the 10% who survive, really are the creme de la creme. Of course, in this day and age of Twitter Millionaire Traders who never lose, it will be harder to get a real number of who out there are really doing well on their own.
Why do people resist taking trading classes in the beginning? Two reasons: Cost and Doubt. They do not want to spend X amount to pay to get trained. Most people think they can do it on their own and just sign up for a newsletter or alert service to give them the info on what to trade. Secondly, there is the doubt. This doubt is due to the fact that there are a TON of scammers out there.
The sad thing is most people are so scared that they will just automatically assume that behind every market service is a fraudulent entity. Most people who end up signing with us for market services follow me or the other traders at Equity Sense for an average of eight months before committing. They want to see if we really know what we are doing.
I do not blame the public for being overly skeptical of most individuals in the financial world due to the prevalence of scams and fraud. But the topic at hand here is this life cycle that is TRUE. The chart above is the simplification of what us traders go through. There are only 2 routes - the DIY way and the get help way.
Ever tried to do your own plumbing projects at home? Do you ever notice how easy it is for the pros to do it but you would take forever to get it done? Trading is similar. Sure, over time, you will get good at it but at what cost? TIME and almost always, MONEY. The trial and error method is only great if you're a millionaire and can throw away $100,000 in experimental trades.
What you get from trading education is the simplification of the process and the unique perspective to how experienced traders approach the market. You get structure and a proper framework of what the market is.
The 90% who lost their money within six months of trading reach the end of that chart only to decide to continue, to seek help or give up. I have talked to people who are successful traders by teaching themselves how to trade and the average time it took for them to really be comfortable with the market was 4 years. Take the same person who is about to start their career and get them through formal training, that learning time would be cut in half almost assuredly.
While the demand ravages on, the evidence has always been clear as per Haver Analytics et al that those who go at it alone have a bigger chance of failing than those who have mentors. The question really is this: With your hard earned money on the line, can you afford to go into the market with trial and error?
by Gavin M.
Here at Equity Sense, we put our money where our mouths are at. It wasn't me but Mike who pushed the alert to clients to think about taking a long at $58 because we were going to do it. This alert was sent out yesterday. Overnight oil popped 60 cents and if you're a futures trader, you know 60 cents = $600 per contract.
While oil, in the chart above, did pop to 59.50 or so, I was pretty happy with my profits. You don't always have to hit a home run each day. Trading is not a sprint, it's a marathon. You will have some lows and some highs. However, it is always about the journey not the destination.
This oil trade worked out very well for me and is the main reason why I didn't take big trades today. It always feels nice when you wake up to profits. It allows you not to take in more risk than you would. It is a state of mind we try to teach our students to have as it really helps to reduce losses.
The worse thing you can ever do to yourself is to end up negative for the day when you clearly were ahead at the beginning. If you're in need of help, we're always here.
By Gavin M.
Are you not entertained???? If there was ever a doubt in anybody's head that Central Banks would intervene, they are all gone. Watch the EURXXX trades overnight. It was one epic gap fill + melt up to inspire more confidence.
I've read the arguments from BAML + Goldman and all the other blogs out there arguing for why the EURO should be UP/DOWN. There are good arguments for both sides but when will fundamentals ever take hold on this? I know deep down the reality is that people are still Hoping against HOPE that there will be a last minute deal before July 6th. Why else are the equity markets not down as much as 10% if this was a full blown panic?
If you cannot stand the volatility in the EUR, trade other pairs and trade other securities. Otherwise, you could just give up trading until July 6th so that you can have a better handle of where we really are going. As for me, at this point, so long as NFLX et al makes me money on a daily basis, I could care less what happens in Europe.
Traders from Equity Sense will be writing on this blog on positions and other market-related things.