The secret that all the Guru's are desperate to keep hiden.

Discussion in 'Professional Trading' started by Brandonf, Dec 29, 2008.

  1. Brandonf

    Brandonf ET Sponsor

    The biggest secret that the guru's are hiding from you is simple: YOU DONT NEED THEM. I'd guess that seven out of ten time's you could eventually make money without them. You don't have to buy the latest indicator that will only be sold to 500 lucky souls for $1000, or the newest $15,000 one week mentoring program. In fact, the secret to your trading success is probably sitting on your desktop right now.

    It's called a trading diary. If your not keeping one your not going to be successful. I'd venture a guess to say that 99% of people who do not keep a trading journal or log are not profitable, or if they are it is barely. Those who do manage to profit without one could see huge improvements in results simply by learning to keep one.

    You see the biggest thing in trading is not learning this new thing or that new thing. It's about improvements. It's about doing the things that you do well, and staying away from those things that your not so good at. It's about making your strong points matter even more, and your weakest points matter even less. If you can simply do that, your going to make a lot of money. Let me give you a few examples.

    Back when I was day trading every day I averaged about $1400. One evening I was looking very closely at all the data in my trading notebook and I made a very important discovery. I found that between 10:30am and 1:15pm CST, basically over lunch, on a typical day I would lose $350. Well, the solution to this problem was fairly simple, and the impact felt right away. I stopped trading between 10:30 and 1:15, and immediatly I was given a "raise". Three hundred and fifty dollars by itself might not sound like a huge number, but it adds up to a little over $85,000 per year. I actually got paid to do nothing! I never would have known that if I did not keep a log of my trades.

    I also discovered that on days with a Fed announcement I lost, on average, about $3000. Again the solution was very simple: I stopped trading the Fed and almost immediatly was given a "raise" of about $12,000 per year. Pretty cool, I found two specific times that I should walk away and do nothing, and as a result I just "discovered" nearly $100,000 extra per year. I don't know about you, but to me that seems almost like free money.

    These are just two examples out of many that I was able to use myself to increase my own success. I know for a fact that I would have never made it without my journal, and all it takes is a little effort in keeping it. I'll do another report later on exactly how to keep one.

    Here are a couple more examples. A former student of mine Moe in Queens, NY discovered that in the first 15 minutes of the day, on average, he lost $500 and over the course of the rest of the day he made, on average, $350. Can you see how powerful of an impact not trading the first 15 minutes of the day had for Moe? It was the literal difference between success and failure, between paying the bills and keeping his "real job".

    Again these are just a few examples, and I'm sure that many of you who do keep a trading diary can share your own. If I could point to one thing though that has been accountable for my success it would probably be a simple notebook. Start to keep that journal, because as I said I can state with near certainty that if your not keeping one, your not making money. If you are making money without keeping one, your not making nearly as much as you could be, I can say that with 100% positivity.

    Good trading.

    PS, please be on notice that this could be a bold attempt by an attention seeking former guru to get you to come to his free website where he doesnt sell anything.
  2. jmoo


    Good advice. I also think that your disipline to not trade those times in which you lose is also superior to many others trading aptitude. I think one of the hardest things to do is resisting pulling the trigger on a whim for a new trade.
  3. <i>"Again these are just a few examples, and I'm sure that many of you who do keep a trading diary can share your own. "</i>

    A written record of your trading day is akin to production records kept for a farm, a ranch, a factory, a restaurant... any other type of business.

    Data compiled for performance, experiments, tests and other facets of any business are critical. Let's say a restaurant owner has always cooked homefries starting with warm water in the pan when potatos are added. Then for whatever reason they begin cooking homefries with cold water to start the boiling process.

    Think there is no difference? There is a noticeable difference in overall results based on that single factor of water temp to begin the cooking process alone. Records kept on cook times, product result, customer feedback, amount of homefries sold prior to and afterwards are all part of journaling success for a restuarant.

    You still need to know the basics of cooking. Just opening a restaurant, buying the latest equipment and experimenting with food until you learn you learn to cook will still result in complete failure. No different than an aspiring trader putting cash in an account, buying the hottest computer and software, then dicking around willy-nilly until something seems to be an edge. End result is still failure and broke.

    But once you reach a point of sustained success, record keeping is an essential part of the next steps onward to improved performance.
  4. Brandonf

    Brandonf ET Sponsor

    From what I have seen not trading can be the hardest thing for a good number of people. I think that the reasons for that are many, but the two biggest one's seem to be the addictive nature of the "rush" some people feel while trading, and also the feeling that if your not trading your not working. I don't know that much can be done about a gambler, but the other one is workable. So many people come from a background of working very hard, and so they think well now that I'm trading my job is to trade. I get paid to buy and sell stocks, certainly I can't make any money if I'm not buying and selling they just continue to trade all day because, well they are traders now and that's what traders do: Buy and sell stocks. For me that was a problem and to solve it I really had to change my thinking and come to realize that the entire process was my job, not just the buying and selling of stocks. I started to come to think of it almost like a pro football player. He stays in shape and practices all year, and during the season several times a day. He does this all so that 16 Sundays per year he can go out and play, and while gameday is the part of his work that you see, the rest of it leading up to that is actually the most important part in terms of making sure that he does well on that game day. When I changed my thought pattern and started to think of trading in those terms then I started to see very good results. Also I think that people tend to want things to be perfect, so if they suck at something they want to fix it. I guess in that regard I'm lucky because I've never been a perfectionist and I've always had the approach of improving what I can but trying to work with what I have more effeciently to improve results. I think that works very well in trading once you have the basics down.
  5. Very insightful posts Brandon. I think if you had a room full of rookies and handed out your written posts the reaction would be: "That's him, that's not me".

    Point being, in the end we have to come with terms with the reality of your words yet people have to find out for themselves whether it is true or not for them. This then becomes the price or tuition.

    Trading is a free for all, and basically the guru's cash in on this because no one knows where to begin when first starting out.
  6. MGJ


    The secret that all the Guru's are desperate to keep hiden

    Have a look at an English grammar book and note the difference between possessives and plurals.

    Also note the spelling of "hidden" with six letters.
  7. Wow, you really do add value to this thread. Thank God you're here to correct us.
  8. Brandonf

    Brandonf ET Sponsor

    Your a whecked smaht guy. Thank gosh fer them spelin poleace.
  9. Brandonf

    Brandonf ET Sponsor

    Btw, I get the spelling thing, but this part still has me pretty confused: <i>difference between possessives and plurals.</i>. I guess that's good news for the stupid crowd though, because if an idiot who failed 4th grade spelling can make it in this business there is hope for a <b>jenious</b> like you too.
  10. What a total nobb!...erm, I mean nob!
    #10     Dec 29, 2008