All about investment

By: Shaun Rosenberg

I would say that there are two different components of trading. These are the trader and the system. Each one has something that they can bring to the table to give you a successful trading system.

The system component is easy to understand. If you follow your own strict rules of what to look for before you invest your money you will come up with some sort of consistency. If you always trade by do the same thing then you will be able to get the same results, over and over again.

This makes having a trading system very important aspect when it comes to making money in the market. Develop a well tested system can be the best way to make good money. However there is one other major component when it comes to trading, and that is the trader themselves.

Some traders believe that a trading strategy should be all system and the trader should try to keep their own thoughts out of it. This can be true to an extent. The major flaw we as humans have when it comes to trading is our emotions.

Our emotions might make us sell too soon or buy too early. That can cause us to lose money. But there is a good reason that traders should not rely 100% on a system and keep some human touch in trading.

This ability that humans can bring is the ability to change and adjust to new markets. You may have a system that is working well buying calls but if you start to see that the market is crashing it can tell you that you might not want to be buying calls right now.

You might adjust that strategy by taking the same rules you learned from buying calls and reversing it to give you good put buying strategies. Or you might try something different. But our ability to adjust is what gives us an edge over a pure systematic way of trading.

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I was attending an introductory 3 hour seminar held by an Options trader back in 2005 with a friend who had never traded or invested in anything his whole life (with the exception of his superannuation fund which he did not manage). I was there for my friend who wanted to know a bit about trading and investing.

The seminar went well and you could tell this by the large number of people interacting; but also because my friend, a very risk averse person was also becoming keen to know more. But when the inevitable sales pitch came he sunk to the bottom of his chair.

"What's wrong?" I asked him with which he replied, "You've got to be joking he's asking fifteen hundred for this course? I don't think so; do you want to go halves, maybe I'll consider it?"

I smiled and thought for a bit; I already knew what I wanted to ask him, the problem was I wondered whether I should or not. Finally I succumbed.

"Can I ask you what your debt is for your university course (he was studying Information Technology)?" "Sure it's about $5000, but will be more like $7000 by the time I've finished". "Ok" I said, "does this come with a guarantee of a job, or even a money back guarantee should you decide after a while you don't want to do IT?"

"What?" and he gave me this most puzzling look.

"Well think about it. Becoming an IT professional is a great career if that's what you want to do, but in reality your income will always be capped, and the only way to uncap it is to become a business owner which is a whole new career in itself. Secondly, there's no guarantee you'll even get a job once you've completed it. I'm not saying that $7000 is too much but it's a fair whack."

"Compare this to a course where the owner is a millionaire and practices his craft at the same time. I'm not saying you're going to become a millionaire using his course or that you'll even like it but he's asking less, for information that helped him become financially free. As far as I'm concerned there is no comparison."

My friend thought for a while and realized he had no answer to what I had said however I refused his proposal to go halves. I had no intention of buying the course; I was only there for my friend. As it turns out he never did end up buying it.

As a trader though I'm not going to defend those who sell trading courses anymore like I did back then as my outlook has changed; but that does not mean I advocate the university education system and the debt scheme attached to it either. Nothing has changed there for me.

What has changed though is my realization that what's important in trading and investing tuition is sorely lacking. A system with rules and indicators is simply not enough. For one, it is usually built by one or two people who share a common goal. All those who try to emulate their system have completely different goals, resources, emotions, strengths and weaknesses and the list goes on.

This is why if you've ever bought into someone else's trading course that comes with some sort of support or forum you'll notice the majority can never get to their desired level. They either completely fail or fluctuate up and down along with their emotions. Those that do make it work have managed to do so because they had a very similar set of circumstances, resources, strengths and maybe even goals. This is why so few can make someone else's method work.

I even witnessed a famous trader who sells his trading workshop for many thousands of dollars admit that only around 3 or 4 of his 15 that he lets in gets it (meaning the rest waste their time and money and are unable to make it work)! That is ludicrous in my view to know this fact, and still take their money. The thing is this teacher is obviously unaware and unable to teach his students the ingredients that made him a success. He just teaches them his system.

I even drilled a trader hosting a Webinar for his latest tuition. I kept asking him if he had several methods of trading and flexibility that enabled someone to adopt a method to suit their resources, personality and strengths; and also if he helped the trader to uncover their strengths. He could not answer me.

By Ricky Lim

For those traders who do not use a Forex currency trading system, they will have to face the possibility of losing money at some stage in their career. This is because they do not carry out their trading in a disciplined way. By using a forex currency trading system they are assured that they will be able to keep their losses to a minimum and continue to trade.

By using such a system a trader is able to remain level headed and face each trade with as little emotion as possible. It is this forex currency trading system system that they have in place which will help them to determine when it is time to execute a trade. This is because they will have price levels relating to the initial stop loss, trailing loss as well as relating to computed and projected price profits all of which have been pre-determined before they start trading.

Those traders who have a system that they follow will end up making some profits when they trade correctly. However if the trade turns out to be wrong then having a system in place will quickly show them that the direction they have chosen is wrong and this in turn helps them to realize that they must get out of the trade as quickly as possible so as to prevent further losses occurring.

When it comes to choosing a forex currency trading system to use then look at other traders which ones they would recommend. Ask them about the experiences that they have had with the system that they have used or are using? Also ask them how using that system or systems has helped them? A great way of getting answers to questions like these is posting them on Forex trading forums and you will be amazed at just how many answers you will receive in reply to your questions.

Also it is important that you learn as much as you can about every type of Forex currency trading system that is available.

What is extremely important however is that if you wish to trade successfully then you will need a Forex currency trading system which ensures that you approach the task in a disciplined way. It is only if you become disciplined when trading will you start to see more gains than losses. Certainly using any kind of trading system will help to ensure that your losses are kept to as minimum an amount as possible.

About the author:
Ricky Lim runs a learn forex trading online site for beginners at www.learn-forextrading.net. Visit his site today for more forex tutorials and articles.

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