Introduction to trading

Invest in yourself as much as you can; you are your own biggest asset by far

Warren Buffet

Warren Buffet is right, you are your best asset. When it comes to your own financial success its very hard to find anyone who is going to care as much as you do about your money. Most financial advisors have more than one client and spend a lot of time trying to get new ones so they are really not focused on making you as much money as possible.

You on the other hand have more time and maybe less expertise than these individuals but the good thing is that if you put forth some effort you can be just as “good” as nearly any financial advisor and in many cases much better. So at the beginning of this series of articles I want to let you know up front that beating the market is definitely possible and highly probable as you gain knowledge in the markets.

Trading is the act of buying and selling a security for profit, in this regard we are all traders and here I want to give you an introduction to what trading is and what it is not to dispel some potential preconceived notions regarding trading as a whole. The entire purpose for trading is to be more active in the market to profit from definitive strategies which may include, pair trading, arbitrage, momentum trading, futures trading, options trading and many other types of strategies. While these may be foreign terms at this point but we will be explaining several different types of strategies to profit from the markets to make returns of 20% or more.

Some people say that trading is gambling and while there are some similarities between trading and gambling they are not by definition the same thing. Gambling, say in Las Vegas, is where you spend money to maybe make some money in games that are rigged so that you lose. Slot machines have win rates of 45-48% at best, basically every game has win rates under 50% so on balance casino’s make money based on this mathematical imbalance. However in trading you put money to work with the expectation of a profit, and while you can lose money in trading and many people do lose money you can be profitable by using a nearly infinite amount of strategies and none are illegal.

The problem that people have with trading is that they believe it is very simple and jump into it without knowing the best practices and end up losing money because of this lack of knowledge. The Trading Launchpad is designed to change this and avoid losses so we advise to not trade while you are learning, because the best way to make money in trading is to have money to trade with.

Most people don’t start businesses without any background or education in a given field, they start franchises and pay very good money for those businesses so here we take that approach, we expect for our students to learn the processes that work, learn the universal aspects to profitable trading so that you can maximize returns.

In the next articles we will dig down into the aspects of trading that will be your everyday, your everyday, things that many people find difficult and go through expectations in trading and other psychological aspects to this profession. To sum things up, trading…

My favorite phrase in trading

When I started trading many many years ago I had no idea what I was doing, there was limited internet and limited ways to search for information. But one way or another I ended up finding chart patterns and instantly loved them, and I was an instant genius at chart patterns! Or so I thought.
 
One of the hardest parts to trading is trying to get new information and sometimes when you learn something you think its reality or truth or valid, most of the time its already known information, outdated or a lie. Its hard to tell the difference when you are starting  out. At some point I came across Dan Zanger of Chartpattern.com (no affiliate). I signed up for his service and thought it was a godsend, it really is and if you are looking to trade Dan’s style please use it, but when he was in chat he used one phrase more than any other, and whenever I see this phrase in the wild I know I am speaking to a wise individual.
 

Not for me

 
This simple and innocuous phrase tells you something about a trader, it tells you that they appreciate your opinion but its not valid for what they do. But why is this such an important phrase? Its because in trading you have to have a niche, something that gives you an edge in the marketplace and something that you specialize in. But this edge is not going to be universally respected or appreciated by others, and visa versa, they may not appreciate your edge and saying Not for me, thanks. Is a very polite way of them telling you that they know who they are and that they may see what you see but they don’t do that.
 
When you are starting out you try many different styles and ways to trade, but once you figure out how to make money you should really try and stick to that methodology and improve on it. Those may sound counterintuitive but they are complimentary, its a bit like a basketball player trying to be a better free throw shooter, you make minor adjustments but the core shot is still there.
 
If you are able to pass up on trades that are not in your niche you are playing the game at a professional level, or at least are on your way there. The ability for you to see something and pass is very mature and many people cannot do that, they swing at every pitch. If 40 things are moving they try to be in 20 of them, but a discipline trader may only take 1 or 2 trades and let 95% of them go by.
 
So the next time you see something in the wild as yourself, is this for me?