Helmut Weymar, the founder of the company, wrote a book on analyzing the cocoa market. He was leaving this analyst position to become a trader, and I met him when I was coming in. We talked a little bit, and he was still in New York for a few years before he went out to Malibu, and we used to get together for lunch.
I remember this instance where I was an analyst. At that time, I was really a fundamental analyst, and I would cover a number of markets, one of which was cotton. As a good little economic graduate, I did all the basic analysis. I went back. I studied the economics of every market in the post-World War II period, and decided that there were only three or four markets at that time that would qualify as free markets. That was my projection, which was good as far as it went.
Marcus, and I were having lunch, and I was starting to short cotton. It was getting to that point where i felt it was fully priced. There are a thousand facts out there about cotton, but he understood that this one fact, that the PRC was the buyer for the first time, changed everything. He was absolutely right.
It went all the way up to 99 cents, which was the highest price cotton had ever seen since the Civil War. He got it right, and he made a fortune on that market, even though I did a lot more analysis and more work, because he understood the one fact that mattered.
Shaw or an Ed Thorpe to make money in the markets. His approach was one that worked for him, and he had that type of market intelligence that is not so much book smarts. What advice would you give to non-professionals who would like to start trading?
However you do it, just pick up different things. Look at different things. Then start thinking about, on your own, start thinking about ideas based upon what you read. Start looking about how you might implement it in the market. Once you have that in place, paper trade. At this point, trading is not an intellectual game for you anymore.
You understand risk, and you know that managing it will not only preserve your capital; it will also protect your e motional well-being.
While some people seek validation or recognition from other traders on Social Media especially Twitter for the trades they take, good traders are less concerned about gaining recognition.
While losses cause some people to grow bitter, they make good traders grow better. Their self-worth depends on who they are, their character and the positive states of mind they choose to generate. Their self-worth is not found in what they have achieved or what people think of them.
Good traders view their trading goals as a marathon, not a sprint. Good traders think for themselves. In fact, the opposite is true — such a skill is often acquired via autodidacticism and direct experience. You can trade more effectively only if you let go of the fear of loss and wholeheartedly embrace its inevitability.
If you have good planning skills, you will place random trades without any proper direction. Great traders develop a solid plan and stick to it. If you adapt this, you will be clear about what your goals are and devise ways to achieve them.
You can always adjust the plan depending on how it works for you. Needless to say, maintaining all your trading records will help you avoid making costly decisions. Many successful traders keep diligent records of their trades. This essential habit provides them a wealth of information that helps them beat the odds and attain success. Great traders pay great attention to detail. Before any trade is initiated, parameters such as expiry time, market price and trade amount among others are shown.
A trader should be able to thoroughly check all parameters and ensure that no mistakes have been made. Being attentive will also prevent you from making the wrong entry. As a trader, you will be able to develop new strategies in relation to the given trading rules. Great traders evolve with evolving markets. You should always be a never-ending student of the market.
The moment you engage in learning new things, you will discover new trading opportunities that others will not realize. All traders want to make money and be financially independent. Even if you make the biggest trades, you do not have to sacrifice your everyday life and be subjected to your trading screen at all times. Great traders know how to balance all aspects of their lives in order to ensure that their trade does not consume them and they can still integrate it with their daily lives.
Anyone who wants to become a profitable stock trader need only spend a few minutes online to find such phrases as "plan your trade; trade your plan" and "keep your losses to a minimum. If you're new to trading, you probably just want to know how to hurry up and make money.
Each of the rules below is important, but when they work together the effects are strong. Keeping them in mind can greatly increase your odds of succeeding in the markets. A trading plan is a written set of rules that specifies a trader's entry, exit, and money management criteria for every purchase. With today's technology, it is easy to test a trading idea before risking real money. Known as backtesting , this practice allows you to apply your trading idea using historical data and determine if it is viable.
Once a plan has been developed and backtesting shows good results, the plan can be used in real trading. The key here is to stick to the plan.
Taking trades outside of the trading plan, even if they turn out to be winners, is considered poor strategy. To be successful, you must approach trading as a full- or part-time business, not as a hobby or a job. If it's approached as a hobby, there is no real commitment to learning.
If it's a job, it can be frustrating because there is no regular paycheck. Trading is a business and incurs expenses, losses, taxes, uncertainty, stress, and risk. As a trader, you are essentially a small business owner and you must research and strategize to maximize your business's potential. Trading is a competitive business. It's safe to assume that the person sitting on the other side of a trade is taking full advantage of all of the available technology.
Charting platforms give traders an infinite variety of ways to view and analyze the markets. Backtesting an idea using historical data prevents costly missteps. Getting market updates via smartphone allows us to monitor trades anywhere.
Technology that we take for granted, like a high-speed internet connection, can greatly increase trading performance.
Using technology to your advantage, and keeping current with new products, can be fun and rewarding in trading.
Saving enough money to fund a trading account takes a great deal of time and effort. It can be even more difficult if you have to do it twice.
It is important to note that protecting your trading capital is not synonymous with never experiencing a losing trade. All traders have losing trades. Protecting capital entails not taking unnecessary risks and doing everything you can to preserve your trading business. Think of it as continuing education. Traders need to remain focused on learning more each day. It is important to remember that understanding the markets, and all of their intricacies, is an ongoing, lifelong process.
Hard research allows traders to understand the facts, like what the different economic reports mean. Focus and observation allow traders to sharpen their instincts and learn the nuances.
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