After closely following this web site and these forums for nearly 2 years I am going to ask a question in hopes of some constructive advice. I will first state my question and then give some info. as to what has led me to this point. My question is "Having realized that I will never have the detailed understanding of Technical Analysis necessary to to be a true expert in the field can I pay someone to do the analysis for me and still have success? Now please read the rest of my background before jumping to conclusions. I am a successful businessman who has never been an Expert at any one thing. I pay a CPA to do my taxes. I pay a Lawyer to advise on law. I pay a roofer to fix my roof etc. Do I have a decent knowledge of these things? You bet. Am I an expert? no. I have been involved in the markets for many years. I have read books from Mcmillan Options as a strategic investment to Point and figure charting by Dorsey to scanning Stocks and Commodities Mag on a monthly basis to following this web site. Through some hard work and good fortune I have a large trading account and quite a bit of time to commit. I would guess that i may have a knowledge greater(markets/trading in general) than 95% but there is a big gulf between me and the next 5% imho. I have really looked inside myself and have come to the conclusion I am not going to commit myself to the WORK necessary to spot a Bull Flag or Doji or Watch 1 min charts hour after hour. I highly respect those of you that have committed to do this. I wont go into all the reasons why I have reached this decision for myself(Family,Other interests, Personality etc.) but suffice it to say I will not be joining your ranks. Having said this though I love the markets and love to be involved. I am doing a little of this and that but really want to know if I can hire a professional to assist me in swing/day trading and be successful or If I am not willing to bite the bullet(become true expert) should I just invest my $ safely and find other interests? I am really just wondering if what I have done in business ie. hiring professionals can work in this environment. On one hand my experiences in life say Hire a T/A expert and stick to the big picture. On the other hand I realize that the markets are more an art than a science and therefore I have a feeling that it may be knowledge that really has to be acquired and can not be purchased. I believe many of the sharpest most qualified individuals in this arena are on these boards and would truly appreciate some frank honest evaluation of my thoughts. Thanks, T. l
FORGET TRADING & LIVE OFF THE INTEREST FROM YOUR "LARGE TRADING ACCOUNT" DONT TRY TO GET COCKY OR "SMART"..
Hi, I'd like to reply by saying this: Yes, you can pay someone to assist you in understanding what technical analysis (TA) is all about. However, even a complete knowledge of various systems and strategies cannot guarantee success vis a vi trading in the market. That is because unlike most other disciplines (legal, medical, et al), just knowing is not enough. Successful trading (meaning beating the market averages) is v. tough to do consistently over a long time, because one has to be able to analyze the direction of prices (equities et al), execute a trade, and then be able to get out, while besting your market costs (spread, commisions, etc.) to be profitable. What makes trading especially difficult in light of all the information available is that one still cannot predict the future from the past. For example, let us say you think a stock is a bullish trend and decide to buy, but then the company is hit with bad news. Does this mean you should get out (stop-loss) or ride it out? This is where trading systems fall apart (think LTCM). They think they are infailable, but are really just making educated guesses. That being said, one can limit your correctable mistakes by apply common sense knowledge to trading. By understanding money management, not chasing losses (doubling down), nor investing in illiquid markets, one can avoid predictable bad outcomes. I'd like to say, one thing about most TA: it's bunk. Why? If it were as mechanical as its proponents say, then all these gurus would be richer than Bill Gates many times over. However, if you want a few tips in TA to look out for, then e-mail me and I will try to be of some assistance.
You freely admit that you are not interested in putting in the time it takes to be a successful trader (let alone a day trader), that in itself is commendable and I believe you when you say that you are probably ahead of most in this game(how many people trade for the wrong reasons?). Why not research and invest in a hedge fund run by a rising Market Wizard? In my experience trying to trade half heartedly or without full focus is a recipe for losses. Perhaps you can get away with being an aggressive investor with say a 6 month time frame without putting in so much time day to day and still feel like you are part of the game? Either way, good luck! BTW LTCM blew up because they threw their money management rules out the window(if they even had any to begin with) and did not stick to trading their system (were so overcapitalized that they started discretionary trading everything in sight just to put the money in to play) amongst other reasons. The book "Why genius failed" is a great read and a real lesson in money management and discipline.
If you are asking only partial questions you will attain only partial answers... technical analysis is no panacea for your trading trials and tribulations... it is but a minor cog... I suggest that you spend an equal measure of your time on issues such as your innate trading psychology and money management...
Sorry if I am wrong, but it sounds like you want to hire someone here who is pretty good, and want her/him to share the knowledge, and preserve the right for the last step of the execusion. If you simply want to hire someone who deal your money, you can use CTA managed acccount or hedge-fund. Maybe, you have an impression that you can trust a good trader here more than so-called professioanl financial adviser around. I understand that.
There are several International Technial Analysis organizations that have stringent requirements for being a member. You've probably read a few books or manuals of some of those organization members by seeing it mentioned in their books About the Author section. For example...there's a Market Technicians Association, IFTA and a few others. I recommend you contact these types of organizations for info on individuals that do hire out their expertise as consultants. Yet, if your looking for someone to trade your account or to oversee you trading your account... any Joe Blow can do that with a recent verifiable trading record and experience of having already done such for someone else. Remember this...most successful traders are trading their own accounts and not the account of someone else...funny huh They are not interested in trading someone's else account unless that account is so large...their percentage compensation of the profits greatly exceeds their own profits had they've been trading their own accounts. For example...I know a successful trader in Montreal that trades his own account 250k. Someone recently approach him and ask if he would trade their 15k account... he laughed...had it been a 1.5 million dollar account...he may have given it some serious contemplation. Brings me back to what I said earlier...if your account is that large... I wouldn't be shopping to hire someone at ET (unless you got lucky and met someone here at ET that's a member of such organizations)...I would contact one of the professional organizations. Think about it...when you hire that CPA, lawyer or Roof Buider...did you go to a discussion forum to find them? Just my opinion and my answer is YES because its already being done by several funds with a heavy foot in Technical Analysis. NihabaAshi
You can't be excellent in every field so it's better to only do what you can do best. If you are a good manager then manage people. In trading industries, there are so many hypes that it is useful that you have acquired some knowledge before delegating to somebody else because there is no obligation of results legally - of course you can always sue them afterwards but it is not garanteed - and they can make moutain of promises and can make even believe that your account is growing with account tricks that you can really have bad surprises at the end. So the best solution is to continue to manage your trading account yourself or ask someone but that you really trust to trade for you - because good trade execution is also important so if you don't have that skill either you may have also to delegate that. As for me I have given some capital - happily it was not big because I was testing - to a crook firm in Germany whereas I knew nothing about trading that's why I am a little biased perhaps when I say that you should be carefull to delegate to somebody else nevertheless as I put this is just rational as I talked about alpha (loss of capital) and beta risk (lack of opportunity) type: when you trade your own money you care more about alpha so preserving your capital is important for you whereas people that trade for you will care more about beta risk and so the loss of your capital is less important for them since it is you that assumes this risk and if they lost you they have or can find other potential clients if not pigeons . P.S.: above all beware of people or firms which only ask you to trust them on reputation. If it is only to take advices service I don't see any inconveniency on the contrary it is the only mean that you can equal chance if you don't master that skill in front of those who do master that. In fact I'm pretty sure that many successful traders are rather bad analysts and use analysis service. Traders are different profile from analyst there is no reason that both competences are united although it can be of course for many also.
I have read and thought a lot about these subjects and feel they are related more to discipline than to study. I wonder if you can be successful in the long run with good discipline and money management but lack of analysis skills?