When you first learn to trade you will most likely be misled by the alleged use of the massive information that is out there, a successful trading career does not require you to use level 2 stock charting quotes, breaking news on stocks, technical analysis, fundamental analysis, volume and options data etc,  all at the same time. Attempting to use just 2 of these techniques combined can be confusing enough, let alone all of them.

Complex systems make you lose focus and result in conflicting opinions about the markets.

This is more evident in today’s markets where information is made available to thousands of traders at light speed. Today’s intraday market moves, particularly those on report release days are a result of the emotions of these thousands of people collectively and not reasoned judgement relating to economics.  Also you can use technical analysis tools alone, on multiple timeframes, and still end up having conflicting signals, especially to inexperienced new traders. Even the simplest of technical signals and chart formations such as a Head & Shoulders formation can be too confusing. Why?  Simply because these technical analysis techniques are more complex than they look, a minor overlooked detail makes all the difference and can turn a selling signal into a buying signal.

So is technical analysis ambiguous? At a glance it appears to be so, but what good traders do is this, they look at charts, at multiple time frames, if weekly charts confirm formations seen on the daily etc.  If they still can’t spot any reliable indications on market direction they turn back to longer term fundamentals, but their approach is simple at every level.

Trading on news and report releases in hope of catching fast, volatile intraday market moves can sabotage your trading system.

It’s impossible to develop a simple trading system based on the news and economic news releases, certainly not without having a mentor teaching you right from wrong.

Trying to add the ‘news’ component into your early trading system will simply sabotage your trading altogether!  Here’s why:  Most new traders do some lame mathematical calculations  on compounded theoretical gains based on the chance of getting on the right side of the market being 50%.  – Big misconception! According to real life traders like George Angel and Afshin Taghechian the truth is that the real chance you have of getting on the right side is a tiny 12.5%.

Yes that’s right; the seemingly fifty fifty probability game is an actual losing game because you have to figure out these variables:

A) Is the news about to be released, really news or has it been already priced in the markets?

One more fifty fifty binary event variable.

B) Will the news to be released be better or worse than analysts expect?

That’s one more fifty fifty binary event variable.

So the supposed 50% chance trading idea gets divided by 2, twice more, giving 0.125 or 12.5%. A guaranteed way to lose money in the long run.

The best approach?

The best thing you can do is find a mentor, a veteran trader with a system that starts simple and ideally uses technical analysis, so you won’t have to worry about breaking news, Federal Reserve interest rate policy etc.  Technical analysis based trading systems are easy to understand, emotionless and this takes a huge complex factor out of the equation.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

A unique way of learning, even better than seminars.

Anyone Can Spot a Signal in Hindsight, but when they are called Live there is No Fudging the Figures. I like live trading seminars for their accurate and rich content, the chance to ask questions directly and see the overall confidence of an experienced trader.  A moderator however, is even more helpful. They can show you how they trade live and how they will face that particular trading day. Every day in the markets is unique, every move is unique, and a very strict, rigid mechanical trading system that fails to look under the hood, eventually fails as market conditions change. 

No matter how well you know your technical analysis based trading system, there’s always more and more factors that can influence market action very suddenly, out of the blue! Some could have been predicted by technical analysis and some couldn’t. The market hides many nasty surprises that can make two identical trends of two different periods, that look identical on the charts but have different fundamentals under the hood, such as different strength in Bonds or Crude oil or Interest rates –these are not visible on the charts, yet they can make the two seemingly identical trends bring about completely different trading conditions. The blind technical analyst follower will definitely fail on one of the two trend periods, the best he can do is be well prepared. Fast changing market conditions that overpower many indicators are not ever addressed in books and even in poor quality seminars, Moderator live trading services do!

A good moderator helping you, while trading live, cannot be matched by any books or even seminars.

Unfortunately, there seems to be so much  junk information on the internet, seminars, webinars, and thousands of books, even books with average to positive feedback that are really worthless and dangerous to a trader. The point is that anyone can write a good book by looking at past data and picking convenient signals while avoiding to refer to conflicting signals and technical analysis when having a lot of uncertainty.

Most of these authors don’t even trade themselves, it’s unbelievable how naive people trust them and fall victims of well presented and well written junk content. I have known some good authors and trading system inventors such as Mark Douglas, Afshin Taghechian and Van Tharp, but they are the exception to the rule. Angel’s day trading tips, Murphy’s classical but ground breaking technical analysis for investors and Taghechian’s proprietary market indicator and divergence E-mini trading are the only rare exceptions.

Live trading is the real test for a good trader to prove their skills!

Live moderator trading is where a fake trader cannot stand, and cannot fool you by any means, they have to prove their technical analysis understanding, they have to prove their understanding of fast market changing conditions (crude, bonds, rates etc influencing markets behind charts) and they have to show if they are real, experienced traders by facing up to a losing trade, getting out fast, and equally holding onto a winning trade by assessing their entry criteria and target level.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

It helps gain the required good trader’s psychology. Good, high quality education such as a live seminar or a mentored trading service offer unique approach to the markets and help new traders develop through asking questions and straightening unclear thoughts on chart reading techniques. Learning speed is enormous, one  good two  hour seminar can be equivalent to reading 10 good books, it’s simply because in the case of reading books you have no direct way of asking the educator to clarify those obscure, unclear points.

A good education will save you a lot of trouble and frustration.

Un-mentored new traders spend many years on a much longer learning curve that is often frustrating, disappointing and can be too costly in terms of taking those wrong, emotional trades that end up losing money. Imagine having a streak of 5 small winning trades, done with a lot of research, many hours of work and live monitoring and then having the next trade which turns out to be a loser and wipes off all the profit of the 5 winning ones you just had made, this is the most frustrating point in a new trader’s life.

There’s no halfway success in trading.

Trading will either break or make your financial destiny; this is something most traders don’t take seriously enough. The cost of good trading education can run between $2,000 and $10,000 but when compared to uneducated new traders losses these costs are negligible and can be earned in a matter of few months, almost stress free. Uneducated traders will still bear the stress of extreme uncertainty, keep making right and wrong decisions without knowing the cause, and will LOSE overall!

A trader can simply learn from the more experienced traders or they can just rely on books and poor understanding with a lot of gaps and attempt to call the markets, they will simply fail sooner or later. All chart formations, indicators and market calling techniques can be so ambiguous and tricky from time to time, that even a tiny detail can change everything in their interpretation. Did you know for example that pre-holiday trading periods tend to reverse the interpretation of a technical analysis selling signal into a buying one that will materialize throughout the low volume pre-holiday sessions? Now compare that to the rigid, mechanical approach of some poor trading systems that would just suggest you sold the markets on that seemingly sell signal.

This and many more examples are the difference between educated traders and uneducated traders who think they are ‘saving money’ on education only to lose 10 times more in the following 6 to 24 months, by which time they usually quit trading altogether or just wait to get financed again. There’s no point fighting the markets, it’s a game where the odds can be adjusted in your favor and therefore is well worth being prepared.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

Trading with a moderator will make you learn fast.

When trading with a live trading advisory service under the supervision of a moderator, helps increase your learning speed and trading efficiency dramatically, you will be testing your gained expertise on a multitude of markets and a chart which helps consolidate your knowledge and this will give you a great feeling of confidence and psychological boost.

You will be amazed how familiar charts that you already had seen, now appear to give.

So many clues about market direction, you will feel as if you were lacking an eye for detail.

The Pros:

Speed: Trading with a moderator will get you many years ahead in the learning curve and will make you absorb the underlying trading system in depth.

Confidence: You feel much less stressed when you have an expert looking over you and supervising your actions, this avoids emotion-driven trading decisions that almost always result in losses.

Capital protection: With high quality trading mentoring you are almost certain to win overall and therefore it makes it easier for people to afford the time devoted to markets and trading, as well as having an existing capital, to start with when they begin their own trading alone later.

The Cons:

Secret indicators: Some mentored trading programs are extremely good but use proprietary indicators which the trader being mentored doesn’t have access to or cannot understand fully, traders will achieve excellent trading results but may not be able to do just as great when trading alone in the future. Too much blind reliance is not good.

Destroys trader creativity: To an extend, mentored programs rob creativity and savviness from traders, even though this is not always necessary as one can always add their own.

Opinions and market analysis, after they have mastered the techniques the program offers.

All in all, it is entirely possible to successfully combine both a mentored program and its strict moderator with your own judgement later on. The bottom line is that there’s very good mentored services out there that will protect you and guide you while trading.

I would suggest not modifying the principles until at least you make a significant gain in knowledge and in your account balance. Then you will be are free to add anything that you feel could enhance the value of that trading system or in the case of obscure, proprietary indicators, replace those with whatever you find most appropriate and you think can serve just as well.

Overall it pays.

Find a mentored service that has a good record and feedback, realistic goals and provides live trading moderator help, ideally one that has a trading system based on technical analysis and not breaking news.

A moderator can only be positive for your trading and I don’t know anyone who has been with a good service and have regretted it, in fact most of these traders remain successful in their trading long after they quit these services, even one month’s mentored live trading will enormously improve your trading abilities.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

10% a day is astronomical! Making 10% consistently on every trading day on almost all 200 trading days in a year would result multiplying your starting trading capital by a factor of 189 million!

It’s simply impossible to sustain such growth because markets are small and wealth gain is finite. As your trading position grows in size the harder it becomes to get filled at a good price, let alone you would soon reach your brokerage firm’s trading size limit.

Nobody makes 10% per day consistently!

Even in the most profitable trades of Warren Buffet or George Sorros you won’t find a consistent 10% return per day. The rule is simple; while it’s possible to make 10% fixed on small trading accounts, (well under 1 million dollars), it is still not possible to make 10% compound gains on a daily basis.

How much do I need to make per day to turn $10,000 into a million in a year?

That is realistic and many have done it, you only need to multiply your $10,000 capital by a factor of 100 over 200 trading days, the daily required growth per trading day is: 2.32%, or to put it in monthly perspective 46.7% account growth per month. That is entirely possible with a good trading system. However even 46.7% per month or 2.32% per day is a realistic target for only extremely well experienced traders. Low consistent profitability is more important than occasional high return periods that are bound to soon turn into losing periods.

Actual trading conclusions from daily advisory services.

I have checked the results of many day trading online advisory and mentoring services, most of them have periods of high profitability that is not consistent from year to year. Here’s a short summary on the following services:

Mohan market force: A  good service that explains some key things but still fails catastrophically as market conditions suddenly change. Mohan’s approach doesn’t adapt fast enough to dynamic changing markets. Therefore is not consistent over the years.

Larry Williams: Fundamentally good service and advice but lacks transparency and fails to educate you, consistency is debatable but overall service is good and can make novice trader money but will not make them a professional trader.

Traders International: Again the service lacks full transparency, I understand they don’t want to give away their proprietary trading methods but they have very good mentoring which can help the novice gain experience reading the charts and pick signals off them.

Their true advantage to other similar services is profitability consistency, they make low but very consistent profits month in and month out and they use much tighter stops than Mohan market force service.

If you truly want to gain experience and be able to trade on your own even after you quit the mentoring program then I think Traders International is the best that’s available. You still have to work hard to catch up with their in-depth analysis but you will have an edge over other new traders.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

Finding a good, live trading mentoring company is all about checking their past results, customer feedback and overall status.  It’s important to make sure you can adopt to their trading program and techniques as well as trading hours. It may be difficult in the beginning but that’s the way it is with good quality services that will make you money in the process and you will learn many good things and tips to use in your own trading.

It shows reliability and professionalism.

Trading services with long track records and past performance can be assessed.

All you have to do is check their consistency, longest losing streak and overall profitability, I have to stress however that consistency and longest losing streak are the most important things, more important than overall return figures, and long established companies have these data available for anyone to see.

Long established trading educators are well financed, can afford to hire expert moderators, market researchers and are here to stay! But above all, they deliver results, they make a difference in a trader’s bottom line, even if someone attends their service for a limited time they will still benefit big.  On the contrary there’s other amateur run services that were established just few years ago, by some losing trader, all they are after is to pick new traders pockets by selling them utter rubbish and useless techniques and maybe little content.

Good trading education services have been around for more than 7 years and have mentors with career long trading experience, ones that have experienced many different, hard market conditions and know how to cope with them next time they occur.

The benefits are unparallel:

The benefits of a long established, serious trading education company cannot be matched by underfinanced, poorly run trading education services, bad services offering uncertain and very volatile trading results.

An example of a good trading service:

Traders International: Established in 1997, has a moderate profitability but is extremely consistent and stable, no nasty surprises and doesn’t depend on a single trader. This service under-promises but over-delivers with its unparalleled consistency and tight stops.

An example of a bad service:

Mohan’s Market Force: Established in 2002, has a very volatile profitability record, sometimes way too high and exciting and sometimes like throughout 2004 where it lost money all the time, yes I have been there and I lost my entire account. Their serious problem was stop loss orders, they were badly placed and too big in size, I remember a losing day’s trades on E-mini S&P 500 with losses mounting to 11 points for the day!

Uncertain, volatile results are not of any use in growing your account, small and consistent is better than high and volatile, in the end the high and volatile end up losing overall!  Stay away from amateurs, stay away from services who cannot afford 5 miss to answer questions because they cannot afford to hire a moderator and provide live feedback on your actions.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

Here’s what to do and how to check their status and past results, always go with an educator, trading mentor or live trading service with moderators that publish their results on a daily basis!   This is crucial in order to make sure you can check their profitability and consistency and longest losing streak in real market conditions at the same time as you follow these markets. Watch this data carefully for over a month!

Looking for a trading mentor, an educator?

Remember there are 3 important variables but this can be tricky so consider the following:

1)      Run an imaginary trading scenario using the daily results of one month.

2)      Use a fixed imaginary account size and trade the same contract size throughout.

3)      Everyday add the supposed profit or loss you made following these results.

4)      Take into account the margin required by a broker for opening a position.

After evaluating the results you will have a clear view of the 3 factors:

1)      Overall monthly profitability

2)      Longest losing streak

3)      Consistency of winning trades

So it’s important to have this data available

And the only way to perform this test is to go with a company that publishes their results on a daily basis, don’t bother with companies and trading services of any kind that delay publishing their results (you will need to give them a few days for admin… but that is it).  You also need to compare their trading with your own trading skills on the daily market and see if they can really help you by performing substantially better than you would if you traded on your own, after all there’s no point paying for a service that can’t deliver better results than you can.

What publishing their results on a daily basis tells you about their trading service?

It simply tells you that they are confident in their trading methodology and techniques and not willing to hide anything, these are normally the kind of services that do deliver actual positive results and can help you grow your trading account while learning, therefore they worth paying for.

Dishonest trading education services usually don’t answer difficult questions, they will avoid for example a question asking about their longest losing streak, and use misleading sales tactics that cannot really fool experienced traders, and what’s more they may even intentionally delay publishing their daily trading results hoping you will just take a look at them many days after you have forgotten that very day’s market trading action.

For example they wouldn’t want you to know that on a day where the SP500 moved 20 points straight up they only managed to make 2 points of profit on the underlying E-mini contract, when you could have made at least 8 trading on your own. So it’s important to

Watch out for these tactics and these will help you tell a decent, honest trading advisory service from an amateur, dishonest one that has questionable future. You want to stick around with the best, the ones that can support you for as long as 2 or more years.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

The right, effective education can cut years off the learning curve. Learning to trade on your own can be a very time consuming, confusing and even potentially hazardous to your personality and psychological status. Trading professionals who are willing to host seminars, write highly informative books or mentor new traders live, usually have 10 – 30 years of real life trading experience, much like any other profession such as successful doctors or electronic engineers in fast evolving wireless design sometimes host 2 weeks seminars or offer actual certified courses that cost many thousands of dollars, just for 2 weeks training  as high as $7000 in fact!  But it does enhance the career and productivity of those professionals so as to face competition effectively.

Learning to trade without a mentor is like learning to drive without an instructor!

Trading is as much about psychology and getting rid of misleading emotions as it is about money management and strict rules with numbers. Do you remember the first time you had to drive for passing your driving license?  Can you imagine what it would have been like if there was no driving instructor looking over your actions and overriding your wrong decisions and giving you confidence?  If that was the case in early driving, these learners would have crashed their cars many times before they learned correct driving. Exactly!  Yet in financial trading we experience just that, we think we are know-it-alls and perfectly capable of managing everything on our own, and that after enough ‘trading crashes’ we will have gained what it takes to be successful.

All successful traders had their mentors.

By comparison to other professions and learning processes, financial trading is no different,  while I fully respect many book authors and I find their material valuable, is not possible to learn everything and gain the confidence successful traders have by reading books alone. Most serious, young traders spend an estimated $2000 on quality books and seminars, $2000  sounds like an significant amount to the outsider, but these traders are serious, they know they are currently risking a lot of money trading the markets, volatile markets like stocks, the e-mini electronic contract or currency futures contracts.

Most amateur, un-mentored traders trade on wishful thinking and they lose an estimated $5000 account balance in matter of few months, not only they make the initial wrong trade, which is not so bad, after all we all have losing trades, even the best, most profitable traders STILL DO have losing trades, but it’s their naïve and wishful thinking view that the market will turn around…  but it rarely does, so they keep answering margin calls one after the other losing as much as $2000 in what should have been a $200 losing trade – part of a winning system shows you how to handle the losers.

Equally on the profitable side, these amateurs who think they are clever ‘saving’ money on seminars and expensive quality books and mentor programs cut their winning trades way too early just because their human emotions get in the way. Mentored learning traders don’t make these mistakes, in fact they recover all the money spent on education within their very first trading month on a $10,000 account!

Trading seminars and mentor programs  DO PAY OFF!  But are expensive, expensive because a highly qualified instructor has to spend many hours teaching you.

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

Electronically traded contracts.

Eminis are electronically traded futures contracts on the Chicago Mercantile Exchange that represent a portion of the larger futures contracts institutional traders use. E-mini contracts are available on a wide range of indices such as the Nasdaq 100, S&P 500, S&P Midcap 400 and Russell 2000.  E-mini contracts are 1/5 the size of larger institutional contracts and so are more affordable to retail traders. So for example the very popular E-mini S&P 500 contract works as follows:  One point of the E-mini S&P 500 contract is worth $50, so for every open trade held, an one point movement in this E-mini index would result in $50 profit/loss, If 2 contracts are held then the index’s one point movement will cause a $100 profit/loss.

Why trade Eminis.

Volatility: Volatility creates huge opportunity which makes it possible to make significantly more with small account balances.

Affordability: Offers broad market exposure at low cost.

Easier to monitor: You only need to watch few indices as opposed to traditional stock picking where you have to scan through 100’s of stocks and still are exposed to single stock pre-announcement movement risk and accounting fraud risk.

High liquidity: Highly liquid market as opposed to single stocks which often lack transparency and can be manipulated by large brokerage firms.

100% Electronic:  Eminis trade virtually round the clock and fill orders really fast as opposed to the old days where you had to ring up your broker, get stock quotes and sometimes had to wait for as long as 30 minutes before you got filled (at a bad price) often wiping out your entire profit, order fill efficiency and speed of the Eminis are unparalleled !

Profit in up AND down markets: E-mini trading can facilitate profitable strategies in both up and down markets as opposed to single stocks that are often vulnerable to short selling restrictions imposed by the SEC (Securities and Exchange Commission).

Tax free profits:  Unlike traditional single stock investing, income from futures trading such as the Eminis is 100% yours to keep.

Eminis are particularly suitable for moderator, live mentor training programs.

So do the Eminis offer an effortless, guaranteed source of income? Definitely not!

Anyone who claims they can teach you how to trade markets, currencies or the Eminis and over promise they are actually lying. However there are good trading mentors out there such as Mark Douglas and Van Tharp who have educated many good traders on Stocks and commodities for long term investing, and mentors like Afshin Taghechian who have spent their entire life researching markets. Afshin Taghechian’s material is focused on short term trading and applies to all markets.  He invented the ‘TIMES’ trading system which is focused on Eminis and high volatility trading objectives.  So why do you think Mr. Afshin Taghechian chose the Eminis out of all those markets to use in his live trading mentoring service? It’s because they know all these advantages of these relatively new contracts – The Eminis!  Comparing the Eminis to other markets or single stocks is like comparing a modern driving instructor’s car to that of the 60’s, one that has no power steering, no ABS and young people are required to learn to drive and park and take risks in that car… why not just use the best option available?

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com

Financial independence.

It is statistically shown that in our society most of us are gutless, feared and socially conditioned.  We tend to desire to become society-compatible by socializing with the wrong ambitionless, laid back people and getting a 9 to 5 fixed income ‘secure’ job just because we feel that we need to maintain our social conditioning.

I have lived through this myself only to find out that the so called ‘secure’ fixed income jobs are far from secure and hide many nasty surprises. In fact, if I may refer to Murphy’s law theory, (If something can go wrong, it will, and it will go wrong at the worst possible time) It applies perfectly to seemingly secure 9 to  5 jobs and I have experienced it.

With the exception of very few, highly specialized and in high demand fixed income jobs anything else is considered to be a waste of our time and true mind power. The best road to true motivational work and financial prosperity is through taking daring and ‘risky’ initiatives to run and establish your own business and financial trading is one of them.

Motivation and achievement.

Trading is exciting! When you trade you look forward to Monday and you can feel bored over the weekend, unlike most jobs, trading is one of those business where you are self employed, and in control of your actions. I personally like trading because it has allowed me to live in different countries and places like very few freelance jobs can.

From an achievement point of view financial trading is just like any other trade business. For example, I have seen people in the import-export, import-distribution and real estate business industry. They have the same personality traits, successful stock traders have.

More specifically they have the same eye for detail, strict money management ideas and the mindset of the deep, knowledgeable opportunity seeker, adhering to the concept of

‘A pessimist sees the problem in every opportunity; an optimist sees the opportunity in every problem’.

Trading is no exception, actually in my own view, trading is much like a real estate investment business which only has much more flexibility, lower start up costs and higher frequency of transactions. The risks and rewards are very similar, as long as someone is willing to work hard, trading can be enormously profitable and I mean life changing.

Financial markets affect everyone.

Contrary to the minds of the laid back, socially conditioned people mentioned earlier, stock markets affect the life of everyone of us, whether it’s currency exchange rates, bonds or stocks they have a direct or less direct but still profound influence on living costs, jobs growth, and the overall way global capital works. Sure the ignorant laid back people don’t care about where Dow Jones stands today or how EURO –USD is doing but they are unknowingly or unwillingly accepting the final losing part of a subtle trade through buying gas at the pump or paying for foreign exchange holiday money or paying their hard earned money into a pension fund whose destiny and performance directly depends on some key stocks. Traders live in the real world and understand how it works!

Paul Murphy is a passionate and successful trader.  Always in search of the best trading systems, and researching ways to help you be the best trader you can possibly be.  Discover how to improve your trading performance with articles and interviews at his blog: www dot trading powerhouse dot com