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In this section we are going to look at many of the problems faced by traders today and then in future sections look at the solutions.
An extract from my latest book:
SECTION ONE – OUT WITH THE OLD!
But if you think you have problems now consider what faced me when I started back in 1985 and here are a few:
- No Internet
- No Smartphones
- Barely any computers!!
- No charting software others than services like Reuters and Bloomberg at thousands per month
- Minimum trading size around £25 per point for futures and £10 per point for options
- Very few books available
- Very few (to zero) good UK trading services (until I started The Technical Trader in 1989!)
So back then I used to prepare my charts by hand and, once I discovered the RSI, I used to work it out on a calculator – I forget the time span, maybe 5 hour.
Matters started to improve when I bought Market Eye in 1987 and then my first computer, an Apricot, in 1989. Together with programmer Peter Maher we then developed Technical Trader charting software around the same time and so I started to get mechanised. A process that continues to this very day and now I can get charts, via IG Index, on my smartphone and iPad plus I can use my computer virtually anywhere either with free Wi-Fi or using my mobile broadband dongle which is the size of a small calculator – things have changed a lot in 25 years!
In fact at this point in the 21st Century the markets are accessible for free to anyone who wants them pretty much 24/7 and people are falling over each other to let you trade them!
All of this makes trading far, far easier but in other ways it has got harder and more competitive. There are now far more traders than we had before and all these traders have available many more tools and techniques than were previously available.
But all of this actually changes very little as far as winning and losing is concerned. The basic mechanism is still the same with 90% of traders losing and 5% winning with another 5% who are close but with no bananas as they do little more than break even.
Spreadbetters see an average account size of around £1500 and 90% of that money is lost in the first three to six months – so the big winners are the Spreadbetting companies themselves.
Have you heard of the 90/90/90 rule?
Brokers and spread betters talk about it a lot and it says 90% of clients will lose 90% of their capital in 90 days!
That will not change, for reasons I explain below, but the purpose of this book is to put you in the winning 5%.
The winning 5% is a great place to be as I know from personal experience and here are some of the key advantages of making the trading business work for you (and make no mistake this is very much a BUSINESS!):
- You can work from anywhere you want and I have traded from tropical beaches, from classy ski resorts, from smart hotels in exotic locations, from beach huts, and, last but by no means least, from home.
- You can work when you want, or not work when you want
- You have no clients or customers to worry about
- Once you win the sky is the limit and the only limitation is your own psychology
- You choose how much time to spend on your business
- You are the boss
But all this good stuff only comes if you can rise above the one basic disadvantage you suffer and this is…
The Spread
In the UK we have Spreadbetting companies that make trading very convenient but however you trade there is always a bid/offer spread meaning you can buy at one price and sell at another. The price you buy at is ALWAYS higher than the price you can sell at (otherwise you could immediately win by closing the trade. Markets and the world generally, do not, sadly, work that way – except when you give but that is the title of another book!).
The spread is generally small but, over time, it adds up, and gives the Spreadbetting company/brokerage (who may charge commission on top of the spread)/market maker/etc./etc. a huge and winning advantage. Which is why they can afford to spend so much money on marketing….
So why are you not making as much money in the markets as you might?
For many people the answers will stack up like this:
- I have no clear system or methodology
- I trade on impulse
- I do not understand how markets work
- I do not treat trading as a business
- I do have a clear system but I don’t follow it
- I keep missing all the best trades
- I often lose far more than I mean to
- I find I keep taking small profits and miss the big bonanza just around the corner
- I trade emotionally
- I follow a tipster but only occasionally
- I have not taken the time to understand how markets work
- I have never had any training and have no real idea what I am doing
- I know I need a mentor but have made no effort to find one
- I’m a born loser and don’t know why I bother!
Let’s look at each of these in turn and as we progress I will give you solutions to them all.
To be Continued…
NB: I want this section to be exhaustive as that way it will be useful to all readers. So if there is a section that fits you but it is not detailed above please let me know. You can email me on john@john-piper.com and/or leave a comment below I will send you a free copy of my book TRADING TRIANGLES (or equivalent) for your trouble.
If you would like details of when the book will be availabke plus free market reports plkease email jptt@aweber.com
Hello John,
I’d be very interested to read Trading Triangles please, even better with a Free offer. Not sure if it’s an e-book or you need an address? (already bought and read your Binary Betting book – a good, comprehensive, and straightforward read thanks).
I am also signed up to 17 April seminar in Surrey, through Mark, and look forward to meeting you both.
I am currently subscribing to Mark’s Daily FTSE Magnet, although sometimes really struggle to read and digest in time to buy into a position. I am determined to succeed and persevere trying make it all “click together”.
I’ve read your web-pages about the Big Call service, and am very interested. However, I am concerned about “information overload” and perhaps trying to “run before I can walk”. I guess there may be synergy with both you strategy and thinking ?
Grateful for your views. Rgs, Colin
Hello John,
I’d be very interested to read Trading Triangles please, even better with a Free offer. Not sure if it’s an e-book or you need an address? (already bought and read your Binary Betting book – a good, comprehensive, and straightforward read thanks).
I am also signed up to 17 April seminar in Surrey, through Mark, and look forward to meeting you both.
I am currently subscribing to Mark’s Daily FTSE Magnet, although sometimes really struggle to read and digest in time to buy into a position. I am determined to succeed and persevere trying make it all “click together”.
I’ve read your web-pages about the Big Call service, and am very interested. However, I am concerned about “information overload” and perhaps trying to “run before I can walk”. I guess there may be synergy with both of your strategy and thinking ?
Grateful for your views. Rgs, Colin