Secrets of Market Wizards

David Harding: A Triumphant Trend Follower

LEARN FROM GENERALS OF THE MARKETS - PART 19

“…In the last all but 15 years I have probably tested more than 500 systems or strategies, but only few of them have made it onto my list.” – Faik Giese

David Winton Harding is a brilliant British funds manager, presiding over research at Winton Capital Management. Earning his first class degree from St. Catharine’s College, University of Cambridge, he was a trainee at Wood Mackenzie; a brokerage firm. 2 years later, he went to Johnson Matthey & Wallace. He also had an experience with Sabre Fund Management (a UK CTA). Later, he co-founded AHL in 1987 which was later named the Man Group. In 1997 he started his own business – Winton Capital Management. Starting out with about two million dollars in that year (1997), he now has about up to twenty-nine billion dollars. That’s why Winton Capital is one of the largest hedge fund in the world. He’s kindly donated to, and sponsored many education and research programs and organizations.

Lessons
There are many lessons that can be learned from David.

1. Never despise the days of your little beginnings. David might be envied for his wealth and consistent success in the markets, but he started as a trainee, then a trader, then a co-founder, then a sole founder and head of research. He started with a few millions and now has many billions. No matter how small your portfolio may be right now, simply focus on successful trading. If you can manage a small account successfully, then you can be entrusted with bigger accounts. If you can’t manage a small portfolio successfully, thinking that, with a big portfolio, you’d become a permanent winner in the markets. Seek ways to become successful first, and then great riches would gradually follow.

2. Get rich slowly (not quickly). Since 1997, Winton Capital has made several hundreds per cent in profits. This is approximately sixteen per cent returns per annum. He’d never made up to sixty per cent per annum. David’s become successful because he was able to make small and consistent profits. Unfortunately, six hundred per cent is what most traders want to make per year. This can cause huge profits and huge losses (portfolios crashing).

3. David Harding is a consistently triumphant trend follower. You may say he uses different types of systematic trading approaches, with the aid of programming and data research. No matter what strategy he uses, he’s basically a trend follower. He allows profitable positions to ride for as long as possible. Position trading makes a lot of sense for trend following. He uses big pictures and trades long-term. With trend following approaches, he made money in fourteen years and ended only one year negatively (even with that, the loss was highly negligible). You see, a small monthly or yearly drawdown would allow quick recovery in a favorable market. This is another evidence that trend following is a time-tested and irrefutable trading approach.

4. Before it can be really said one is conversant with a strategy, one must have traded with it in bull and bear markets, in noisy and quiet markets. Before a strategy can become really dependable, it must be able to makes gains in all market conditions, otherwise, the speculator would need to know when to use it and when not to use it. The optimal market situation for each strategy must be known.

5. You don’t need to be an accurate market forecaster before you can be permanently triumphant. David isn’t a market predictor, yet he’s a market victor. The permanent uncertainty in the markets would forever be our ally. You’d need to know how to handle right and numerous wrong trades and yet be successful.

Conclusion: Following the line of the least resistance doesn’t agree with the common trading mindset, since one may even lose over 7 out of 10 trades, and yet show some positivity at the end of the trading year – minimal negativity compensated for by minimal positivity. It’s about 3 out of 10 trades that would make the trader triumphant (as a trend follower). What most people fail to agree with is that, one doesn’t know the trades that could bring positivity. This is a matter of self control, taking trades unemotionally and letting profits take care of themselves.

The article is ended with a quote from David:

“We know that we know almost nothing. But the “almost nothing” we know isn’t completely nothing, and we only bet on that.”

 

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Trend global
Congrats to him/oldest short seller;
God bless him.

But i see no qualifications[anywhere, incliding his info, my info ] for a being called a top trader/market wizzard./top investor?????.

Correct me if i am wrong.
Top trader is not word we just thro around ,cause we like someone.Not at all.

I understand newspaper writers lie like a persian rug, but we dont rubber stamp error @ elitetrader.Thanks

 

How much did he make in 2008? I use to follow his blog and all I read was him getting stopped out.

 

What’s So Special About Mark Carney?

Mark Joseph Carney is an economic giant who’s now constantly making headlines. Even his critics can’t deny his achievements.

Meet the Economic Giant
Mark was born in March 16, 1965. He was educated at Francis Xavier High School in Edmonton, Harvard University, St Peter's College, Oxford and, Nuffield College, Oxford (bagging a PhD in economics in the year 1995). For 13 years, he worked for Goldman Sachs at their various offices in important cities. Between the year 2004 and the year 2007, he worked at the Canadian Department of Finance. From the year 2003 to the year 2004, he was a deputy governor of the Bank of Canada. In February 2008, he became the 8th Governor of the Bank of Canada. He’s also serving as Chairman of the G20's Financial Stability Board (assuming that post in the year 2011).

What’s So Special About Mark Carney?
Mark is said to have saved Canada from the adverse financial circumstances of the late-2000s. And as a result of this, he was given accolades by top financial magazines. This feat was achieved by giving enough liquidity to the Canada’s financial system, keeping Canadian banks well funded, keeping interest rates very low, and other conservative measures. The Canadian economy has survived the global credit crunch, and is now doing well.

On November 2012, George Osborne (the British Chancellor of the Exchequer) made it public that Mark would be the next Governor of the Bank of England. He’s expected to succeed Sir Mervyn King at the end of June 2013. He’ll be the 1st Governor of the Bank of England who’s not a Briton, since the founding of the Bank in the year 1694. The official term for a governor of the Bank of England is 8 years, but Mark has mentioned the possibility of stepping down after 5 years. His annual remuneration is close to $1 million USD – far more than his predecessor.

Mark Carney has enjoyed enviable academic career, professional career, and the glare of publicity. He’s highly paid and would even be paid higher. Because he shielded Canada from the adverse effects of the world financial crises (while many other countries languish), he’s now seen as someone who can bring Midas Touch to the British economy. In order to achieve this, the Bank would be given more powers.

I wish Mark Carney the best of luck in his career. I hope he’ll be able to meet the expectations of the British people, and return the British economy to an enviable position in the world scene. However, the strategies that work in one context might fail in another context. What works in one country might fail in another, as a result of many factors that space and the time would not permit me to mention. The best central bank governor isn’t a magician. In the midst of these accolades and honors, Mark should tread very carefully, for the whole world is now watching him. If he does well, the accolades and honors will continue, thus increasing. If not, the praises and commendations would turn to morbid criticisms. Rather than being realistic, the public are often idealistic. This moment, the public may say: “The crown is ideal.” The next moment, the public may say: “The crown isn’t ideal.” So that ‘Blessed is he who comes in the name of the Lord!’ won’t be turned into ‘Crucify him! Crucify him!’

Conclusion: Whatever the Bank of England does under Mark will have profound impacts on the British economy and the Cable (and perhaps Europe and/or the world). Nevertheless, the good news for Forex traders the world over is that, whatever happens to the Cable; whether it goes up or it goes down, we can make money from it by going long or going short.

This article is ended with the quote below:

“…However, ensure that you never get too optimistic and take bigger and bigger risks as a result of overconfidence.” –Steven Giles

Source: Paxforex.com

 

The Cost of Discipline – Part 1

We don’t derive satisfaction from gaining pips only or through some elusive Holy Grail. Disciplined traders get satisfaction from doing what they know is really right, even when they take losses occasionally. Some hate loss to the extent that, if he were a person, he would be lynched. Only a lack of knowledge would make someone give up trading because of a losing streak – something that market wizards know is normal and they constantly anticipate and control successfully. Expert traders measure real satisfaction from their level of discipline, as futures gains and losses are measured in ticks, currency market gains and losses are measures in pips, and as those of stocks are measured in points.

There are different aims for different market speculators. Certain speculators focus on risk control or having as low roll-downs as possible (and some may want to double their account every week). Yet, certain traders are making attempts to combine huge profits with less roll-downs, like fifty per cent per annum with no more than twenty per cent roll-down. No matter what you want, lot sizes are what should be used to attain your realistic trading goals. Given the importance of safe uses for lot sizes, all traders ought to take it serious. Yet, in reality, many rookies and even experts don’t bother much about this powerful tool. They prefer to focus on a magical methodology, trading instruments and market types. Though nothing is wrong with the aforementioned, they are ineffectual without the judicious use of lot sizes. Granted, a nice strategy helps you formulate sensible lot sizes in your trade, however, lot sizes are great in their own right. Why? By using too big lot sizes on small accounts, many traders have seen great roll-downs on those accounts even when they have superb strategies.

Why aren’t we disciplined? Do you hate to hear this? Well, without being disciplined, you’ll eventually find it impossible to outsmart the markets. Trading success is simple only when we’re disciplined do to what’s right. We find trading success elusive because we can’t be disciplined. Some know the grim consequences of certain hard drugs, but they still use them. We know certain types of junk foods that are detrimental to individual’s health, but we can’t desist from eating them. We know some dangerous lifestyles, but we still live them. We know what are morally wrong, but we find them appealing. We know the best ways to handle money, but do we do that? There are many more examples… As long as the markets exist, there would be disciplined and undisciplined speculators. Undisciplined speculators trade rashly, but blame others. Being undisciplined means knowing the correct trading styles, but doing something suicidal.


Our ultimate goal is to make decent profits from the markets (logically quarterly, on annual basis) irrespective of what the markets do. In order to achieve this goal, there are trading principles that must be incorporated into our speculative activities. The reality, however, is that, it seems that the human mind isn’t wired to be disciplined enough to do the right things. How can we be disciplined? And what are the advantages that might be derived from this? The part 2 of this series would talk more about it. These trading principles would be unfolded gradually.


Conclusion: Though you can’t change what’ve happened to you in the past, you can take steps to ensure your success in the future. All over the world, there are people that, regardless of their nationality, skin, color, ethnicity, or language enjoy success in the markets. Yes, a bright future awaits serious traders!

The quote below ends this article:

“A trading system idea might look like it won’t work, but the more knowledge you have about yourself, and the more you understand yourself, the better you’ll be at determining whether you’re looking at the truth or a belief. The systems that work in the markets are so much simpler than any I would have thought possible, and the potential returns are so much bigger.” – Frank Eaves

Source: Paxforex.com

 

Harnessing Profits from Short-term Trends

Finicky traders are usually attracted to high-flown trading systems. In the end, they see that even a complicated system can’t enjoy long-term survival in the markets if safe position sizing and risk control measures are not included in it. The strategy discussed in this article is very simple, but powerful. Top traders have found a way of making quarterly or annualized profits using simple speculative methods. Below is one way of doing this.

Trading on 5-minute Charts
The Simple Moving Average period 10 is used as the sole indicator with the strategy, since the price action is enough to show the direction of the market. If the market is rising or falling or moving sideways, you’ll see it yourself. It should also be noted that only pairs and crosses with small spreads are used for this strategy (a pair or cross whose spread is more than 5 pips oughtn’t be chosen, for they’re good only for swing or position trading systems, not intraday systems, like the one described here). Tuesdays, Wednesdays and Thursdays remain the optimal days of the week for this strategy, though as the example below shows, it can be used successfully on Mondays and Fridays as well. Please see the section titled; “Details of the Strategy,” Normally, there’s been a significant northward push prior to sighting an equilibrium zone in the market. This significant northward push could happen sooner than we think or earlier than that.
It’d be sufficient for this bullish push to be conspicuous and as a result, for the SMA 10 to be trending upwards. Having this condition is mandatory. Additionally, we need to know when the bullish push is happening. This is merely a situation in which the price makes higher highs and lower highs on 5-minute charts in which more and more buying pressures push the market upwards, at least in a near-term. Short-term trend is thus vividly visible on a small timeframe like the 5-minute chart, because this can also be capitalized on. Normally, the SMA goes up only when there are buying pressures. The bullish push would then be so strong that bears would be pummeled continually, as distribution territories are broken upwards (one after the other). With these conditions, there is great possibility that a long trade, if opened, would probably go in the forecasted direction of the speculator. This is a clean bullish market. It should also be noted that the idea explained above could be reversed logically for a bearish market.

Strategy Summary
Strategy name: 5-minute Trend Catcher
Suitability: Good for full-time traders
Charts: 5-minute charts
Indicator: Simple Moving Average period 10
Instruments: Typically popular pairs and majors with no more than 5 pip-spread each (e.g. EURUSD, EURGBP etc.)
Entry condition: There must be a strong bullish market or a bearish market (stay away from a sideways market)
Entry rule: When the price is trending northwards and the SMA 10 is sloping along, enter a long trade as soon as the price pulls back and touches the SMA 10. Reverse the logic for a bearish market.
Best trading days: Tuesdays, Wednesdays and Thursdays (but could be used on Mondays and Fridays)
Position size: 0.02 lots for each $1000 (or 0.01 lots for each $500)
Stop loss: 15 pips
Take profit: 45 pips
Trailing stop: You can lock about 15 pips of your trade if you’ve made around 30 pips in profit
Exit rule: You exit when your stop is hit or your trailing stop is hit or your take profit is hit or when the maximum trading duration expires.
Risk-to-reward ratio: 1:3
Maximum trading duration: 12 hours
Worst-case scenario: Stop trading for the week if you go down more than 5% of your current balance. This may mean the week isn’t favorable to the system
Survival possibility: Long-term survival is possible with 35% hit rate

Trade Example
We’d be able to show only one example here, for limited space and time. This is a typical instance in which a trade was managed with discipline. Please see the chart that comes with this strategy. Here on the GBPUSD 5-minute time horizon, the red vertical line on the left shows where the trade was entered while the red vertical line on the right shows where it was exited. In this example, the spread was not considered. On January 21, 2013, there was already a short-term downtrend on the Cable, as the SMA 10 was sloping downwards. In the afternoon, the price (which had previously closed and trended below the SMA 10) retraced upwards and touched the SMA 10. A short trade was opened, after which the market moved sideways. Later it moved downwards – not in a straight manner – and eventually hit the target. Please note that the trailing stop was used in this example. Besides, it’s imperative that we stick to our trading plan, no matter what the market does.
Instrument: GBPUSD
Order: Sell
Entry date: January 21, 2013
Entry price: 1.58600
Stop loss: 1.58750
Take profit: 1.58150
Trailing stop: 1.58450
Exit price: 1.58150
Status: closed
Profit/loss: 45 pips

This is one best-case example for this trading methodology. However, there is a fact: the money and risk management recommendation that comes with the system would ensure your survival with less than 50% accuracy. Any advanced trader would easily comprehend what is meant by this. Can we predetermine how many trades we can win or lose? Certainly not. It’s nice to think we can win all our trades, but that isn’t realistic. The Holy Grail would cause one person to have an undue advantage over all other traders. If you’d a system that can never lose, then you’d quickly have all the money in the world. Once again, this isn’t realistic.

Conclusion: It’s our hope that this simple strategy would bring improvement to your trading experience as you make more than you lose. We’re determined to continue providing good trading methodology of enlightening and appealing positive expectancy – in Forex and other types of financial markets – to benefit our many readers who acknowledge the potential in trading and who want to benefit from activities in the markets.

This piece is concluded with a quote below:

“Actually, when you are in the markets, every blemish, weakness and character flaw in your personality will be challenged, called out and tested. Now, that doesn’t mean that the markets are doing that to you. On the contrary, the markets have no intention for you; there are no rewards, punishments, pain or risk in the markets, only consequences.” - Dr. Woody Johnson

Disclosure: This article is only for education purposes only, and is not a trading recommendation. It was written as what the author was doing, not what he wants others to do. There is risk of loss in trading.

Source: Paxforex.com

 

The Cost of Discipline – Part 2

“The truly successful traders are incredible discipline fanatics. Presumably, it’s not even enough to be more discipline than the average person. You just need to be in the top 10% group. Self-discipline causes the trader to place certain obligations on himself.” – Christian Lukas


Being disciplined enough to do what are rights in the markets doesn’t always make us look smart. The trader who doesn’t use stops may look smart when the price comes back to his entry level, yet he’ll have to blame himself when the price on one pair/cross refuses to come back to its entry level. When do you think the AUDUSD will go back to the psychological level at 0.6000? The trader who uses stops may look stupid as he sustains small roll-downs on his accounts, especially when the price goes back in his direction after getting stopped out. Yet, the stops will, one day save him, his career and his nerves. Someone who uses excessively big position sizes may look cute when he gains huge profits with small price movements (whereas huge losses are possible with small price movements). Whoever uses small position sizes to get small profits would be derided as using minuscule lots, whereas minuscule lots would lead to only negligible drawdowns in bad market conditions.

A trend follower needs self-control to ride his winners. Planting is similar to long-term career in trading. A planter plants the seeds and employs patience for the ultimate results – harvesting. As the seeds grow, he patiently tends the sprouts. It takes as long as necessary for seeds to grow into trees. A speculator looks for a signal that meets his entry criteria, and then opens a trade accordingly. He manages his trades until an exit criterion is fulfilled. A sane planter knows it’s unrealistic to look for instant harvest, because certain conditions must be fulfilled before harvest can take place, neither can he force premature harvest. If a speculators misses a signal, he’ll be disciplined enough to wait for a new signal. Trending markets are formidable: one should flow with them, not against them. The financial markets are thus formidable, so we need not resist its flow.

What should we do, then? We just need to be disciplined enough to avoid trading styles that aren’t in our best interests and embrace those that ensure our long-term success. Trading psychologists help in achieving this. Are we disciplined enough to obey simple winning rules? Writer Julie A. Link said: “When I was young, I thought the cost of living in my parents’ home was too high. Looking back, I laugh at how ridiculous it was to complain. My parents never charged me a cent for living at home. The only ‘cost’ was obedience. I simply had to obey rules like clean up myself, be polite, tell the truth... The rules weren’t difficult, but I still had trouble obeying them. My parents didn’t kick me out for my disobedience, however. They just kept reminding me that the rules were to protect me, not to harm me, and sometimes they made the rule stricter to protect me from myself.” Successful trading rules are there to save your accounts and your nerves, and make you realize your goals in the end. These rules would be mentioned in future articles.

We are grateful that a wonderful instrument like Forex is available for us, for it has many blessings inherent in it. It rewards the disciplined. Disciplined traders have maintained crucial priorities in their career, and they’ll stick to other important aspects of trading. There are winning trading principles that have stood the test of the time, and disciplined traders stick to these principles even though the principles are not perfect. Disciplined traders believe they’ll be great in trading (with realistic expectations). They eventually become market wizards

Commending the Disciplined Trader

Your trading plan is clearly stated,

Offensive and defensive weapons are with you at the war front,

Profits come to you easily,

You are an expert who remains unperturbed

Survival is the real winnings

You react to profit and loss in the same way

No matter what your open orders do

Your experience helps in selecting great signals:

Here is your opportunity!

Please show them you are a victor

For you have always been victorious!

Conclusion: Lack of discipline will cost us something. Can you now see why discipline is crucial to your success? To be aware of this is a great step towards your personal evolution as a successful trader. As it’s often said, “To be conscious that you are ignorant is a great step to knowledge.”

I conclude the article with a quote below:

“Trading is simple, but it isn’t easy. There are many obstacles and challenges. Do you have that attitude of courage, tenacity, perseverance and determination to start each trade afresh, regardless of the outcome of the previous trade?” – Paul Wallace


Source: Paxforex.com

 

The Collapse of 2 Big Financial Institutions

“Now, if a trade moves against me, I’m out.” – Charles Kirk

Many big and small financial institutions have collapsed – not just the only 2 that are mentioned in this article. However, the 2 institutions that are mentioned here are known to most well-informed fundamental analysts, especially those who also research past events in the financial world. Those 2 institutions didn’t collapse recently: they did years ago, but there are great lessons traders, investors and funds managers can learn from their sad stories. When one falls into a pit he becomes a warning to others. One was Barings Bank (a merchant bank) which collapsed in the year 1995, and the other was Amaranth Advisors hedge fund, which collapsed in the year 2006. What can you know about these institutions? What led to their collapse? What can you learn from this? How can you prevent the collapse of your trading account/portfolios, no matter how small it is?

Barings Bank, founded and owned by Baring family, existed between 1762 and 1995. It was the oldest investment bank in the UK. This great institution went to ruin, following some irrational gamble by Nick Leeson (an employee of the bank). He was caught in a wrong side of the markets and he refused to smooth his positions. Instead, he was adding more to his losers. He lost about $1.3 billion while engaging in futures trading at the bank’s office located in Singapore. He was jailed, and later released in 1999.

Amaranth Advisors LLC was a hedge fund whose assets were worth nine billion dollars before collapsing in the year 2006 (After losing around five billion dollars). The fund made use of various strategies in speculation. It was founded by Nicholas Maounis and had its headquarters in Greenwich, Connecticut, USA. The person behind the colossal loss is a Canadian trader named Brian Hunter, whose irrational speculation on natural gas futures went awry. It was one of the biggest negativity in trading history.

When one falls into a pit he becomes a warning to others
We should stop deceiving ourselves (many people want to hear that they’re right even when the reality proves otherwise). It isn’t good to trade in the wrong market direction, especially when the primary trend is against us. When there is a vivid downtrend on the chart, it can only mean one thing: the price is skydiving. What is the best direction to take when the price is falling? On December 31, 2008, the USDCHF closed at 1.0669, whereas it closed at 0.9146 on December 31, 2012. Imagine what could’ve happened to someone who refused to close his long position or sought only long trades since 2008? Do you buy when your model signifies a ‘sell?’ Do you sell when your model signifies a ‘buy?’ Can you imagine how many pips the USDCHF has lost since the year 2008? There’s no bad thing with a downtrend, on the condition that traders accept that a market is weak and speculate accordingly. We make money in bear markets only when we sell short.

Learn a lesson from the fig-tree. A strong market would form a series of higher highs and higher lows, and conversely for a weak market (which forms lower lows and lower highs). For refusal to follow the line of the least resistance, a trader whose account was very big now has a very small account (meaning the person is poorer). Trading accounts have imploded because of refusal to know when to hold on to a trade and when to cut a trade. For refusal to accept the reality on the markets, big financial institutions collapsed. It isn’t uncommon for some instruments to continue their weakness even when good economic figures come out, and as a result of this, my experience has coerced me to trade according to what I see. It’s imperative to know when some pairs/crosses should be bought and when they should be sold. It’s imperative to look at the price and do what it does, lest we regret. Profitable trading goes hand in hand with positive expectancy, realities, normal psychology and risk management.

Conclusion: When it comes to successful trading, consensus opinions would hardly feed you and your family. If consensus opinions worked, then majority would be winners. The modern market conditions don’t usually favor buy-and-hold methodology; and where the markets are perpetually weak, simply sell short and rake in profits. There are many permanently successful financial institutions, and there are ones that have gone kaput. The same is also true of private traders. We strongly wish that you become successful through your speculative activities. We urge you to learn how accurate risk management can lead to peace of mind and happiness in the future.

This piece is ended with a quote from Simit Patel. It’s all about taking small losses, so that your account can recover quickly when the markets become favorable.

“…Not every trade is going to be a winner, but so long as opportunities are taken and losses are kept small, this is not a problem. It is the big losses that are fatal, and it is the fear of taking trades that causes traders to miss the winners. Psychology is likely the biggest obstacle to success: taking small losses and bouncing back from them when setups appear is essential to success, and is the real reason success remains so elusive to so many.”

Source: Paxforex.com

 

What is the point of living, if everyone dies? Your question is a non-sequitur...

 

Teach Your Teens the Art of Trading

“Children are very precious. Parents are also very caring. Do you know these?”

Most parents want the best for their children, and they strive to achieve their aims, even in the face of stubborn obstacles and difficulties. A serious religious parent teaches her/his children about their faith when they’re still very young. In fact, a famous proverb says: “Train a child in the way he should go, and when he is old he will not turn from it.” When an average child is asked, what do you want to be in life? The common answer is: “I want to be an engineer or a doctor or banker or a pilot or a lawyer or a footballer,” etc. No-one will say, “I want to be an online trader.” Why? It’s because this is the mindset that is impressed into them by their folks, since they themselves are yet to grasp the potential of online trading. Those who know about it think it’s too risky, without knowing the principles that can lead to everlasting victory in the markets.

Forex trading is one of the best vehicles that can be used to shield yourself from the persistent pecuniary uncertainties, widespread unemployment and sudden dismissals from jobs, which are so rampant nowadays. Many were having high aims when young, but now they’ve been disillusioned. The idea of going to school, studying hard to get good grades, and then getting a good job, no longer works always. Why are there very few genius traders? It’s because many people aren’t exposed to the world of trading until they’re very much older. If teens are exposed to trading on demos, as they practice risk-free on the virtual accounts that are subject to the real market data and conditions, their trading genius would be awakened. Wouldn’t you want your child to be a trading genius before the age of 22? Would it be possible for anyone to be a genius in other fields of human endeavors if they’re not yet a genius by the age of 22?

Teens should be taught the art of trading, but they should be restricted to demo accounts only, until they reach the legal age in which they can make independent financial decisions on their own. Yes, teens shouldn’t open live accounts until they come of age. However, they can play with demo accounts (as if playing Nintendo games) until their skills are improved. In this regard, demo accounts are a unique tool in teaching your children. If a child will become great in life, observant parents will notice some traces of greatness in the child while he or she is still young. Your children would learn, by experience that uncomplicated methods of speculation ought to be used. If you really love trading and know that it can bring financial freedom (as it’s done for countless known and unknown people), why can’t you teach your children (especially your teens) how to trade? You can show them how to do this when they’re on holidays or long vacations, and encourage them to do further research on their own and practice their own ideas.

It’s a pity that there are still many people who procrastinate. They don’t know that what can be started today shouldn’t be postponed till tomorrow. Some say: I’m not yet settled down. Once I’m settled down, I’ll start learning Forex.” Others say: “There are some things I’m doing right now. Once I finish those things, I’ll start learning trading.” The fact is that, there’ll always be things you’re doing. So if you don’t start learning, there’ll always be alibis. The earlier one starts the journey to financial freedom, the better. The earlier you start learning about the markets, the earlier you attain the level of trading mastery. My regret is that I didn’t start Forex trading earlier. If I’d started it far earlier, I’d have gone very far in attaining my trading goals and ambitions. But, thankfully, I’m now in the race.

As for me, I’m going to teach my son on demos, while he minds his formal education, I’ll also teach him how to spend less than one hour per week on the markets, and yet be a profitable trader. I want him to be become a market wizard, becoming financially independent in future, unless he chooses otherwise (since I’m not going to force my opinions on him).

Jeff Cooper, when he was still young, learned the art of trading from his father, and he later became a legend of the Wall Street. He had love for trading that kept him searching until he discovered the secret of permanent success. Mike Baghdady learned from his father, and has now become a blessing to the trading world. Peter Soodt learned from his father, and he’s now a celebrated and profitable trader/coach. Joe Ross was taught by his uncle when he was as young as age 14, and he’s now one of the most experienced and the most eclectic traders in the world. He trades for a living and has insatiable passion for teaching how the markets work. Philipp Schroeder and Valentine Rossiwall are both young and highly profitable traders. Philipp and Valentine have other goals in mind, yet they take trading serious. Oh, how bright and beautiful the future of these young men would be! Anton Kreil started trading while in his late teens and he retired from the investment banking industry at the age of 28. He now trades his own money and enjoys financial freedom, and he’s still in his early 30s. Kenneth L. Fisher learned about trading from Philip Fisher, his father (who was a great investor) before he founded his own investment firm. He’s on the 2011 Forbes 400 list of richest Americans. He was worth $1.7 billion in the year 2012. As of 2010, his company manages $41.3 billion in 38,521 customer accounts and has been called the largest wealth manager in the United States.

With time, your kids would be forced to be disciplined – in the face of negativity and uncertainties they face on demos. This really calls for rock-solid discipline, meaning that one needs to stick to one’s time-tested trading plans. Negativity shouldn’t be termed as stupidity, for that notion can’t help their trading mindset. If they follow their trusted trading rules and they make profits on demo, they’d be happy. It’s joyous to see your efforts bringing great results and that your goals are being achieved.

Conclusion: The world needs traders – profitable traders. Would your kid be one of them? Successful traders came from many areas and different walks of life. They have individual personalities, various strong points and weaknesses. As your kids have a feel for the markets, they’ll forever remember their mistakes and a number of beautiful trades – a great experience that’ll pave the way for trading mastery. They’ll quickly metamorphose into mature traders. Sharing trading facts with others bring us more satisfaction than keeping the secrets to ourselves.

This article is ended with a quote from Louise Bedford:

“You see, studies have shown that those who believe that they can alter their behavior and their habits to create a different outcome are happier people. They persist for longer. They score better on tests… Those who think they can't change, and that intelligence is fixed tend to quit at the first sign of trouble and don't stick around long enough to master a skill.”

Source: Paxforex.com