Trading has come a long way over the years, and today with the internet and technology, trading can be a profitable venture for anyone. There are various types of people trading in various markets around the world, from the “Commercials” (large institutions), to the Large Speculators (deep pockets) and you the “Small Speculator”.
Though people trade for a wide variety of reasons, to be successful in the long term one must approach trading as a business. It’s not a game; it’s a business. If you don’t treat it like a business, then you are doomed from the start.
Get In Or Get Out
If You Can’t Get 100% Into What You’re Doing, Then You’d Better Get 100% Out Of What You’re Doing.
Many people who trade are average hard-working people, probably a lot like you, who are just trying to supplement their income and trade on a part time basis. Based on experience, generally less than 1% of the speculative traders are full time, and over 80% don’t implement a winning trading plan.
Millions of dollars have been lost by people who enter the markets without sufficient training, with the idea of getting rich overnight. When they don’t, and even worse, lose all their money, they blame the market itself. The person they should blame is themselves. Many people see it only as a form of gambling. In some ways it is, but we can stack the odds in our favor.
Becoming wealthy in the trading business is not uncommon, many people have done it before, and many more will do it in the future. Even if you don’t have a lot of money to start trading with, you can still be successful. Richard Dennis, as an example, borrowed $1,600, and turned it into $200 million dollars trading commodities in about ten years. He didn’t do it overnight and without tremendous effort. He studied, applied himself, made a plan and had the discipline to follow it exactly.
It seems like everyone wants to get rich quick. You need to forget about this if you are going to learn to trade. One can get rich trading, but it will probably not happen overnight. It takes time, patience, and a thorough understanding of how to trade. Risk can be controlled more in this business than any other business, if you know what you are doing. This takes time!
There are basically two types of traders, although some people mix a little of both in their trading style.
The fundamental trader, or a fundamentalist, is someone who studies the supply and demand of a given market. For example, they look at things like weather patterns around the world, droughts or floods, that would affect the world’s supply of a commodity. Remember that commodities are a world-wide market. As a fundamentalist, you might buy a wheat contract because you think there is going to be a drought this summer in Russia causing the price of wheat to go up because Russia’s supply will be down. Or as governments change their money supply policies, for example raise or lower interest rates, the effect on Bonds and Currencies prices will be seen.
The technical trader, or a technician, bases their decisions on current and past market trends that are reflected on charts. As the price IS the market, 100% of the information on a chart is true, unless there is a mistake with the data that is. Let’s say that you are looking at a chart and you see that the price of wheat is the lowest it has been in 20 years. Based on that and other technical indicators, you might “go long” on a futures contract in wheat thinking that the price is going up.
In order to successfully run a business the most important thing is to have a winning plan. It’s not enough to have a good idea; you must have a complete plan in order to be successful over time. This course with the practical lessons is designed to give you just that, the ability to first understand what a complete trading plan is, and then to ultimately be able to create and develop a plan that works best for you.
In this course, you are going to learn technical trading. One of the advantages of being a technical trader is that you don’t have to become an expert on the underlying commodity. Technical trading is trading based upon technical information found on the charts. Let’s say that you wanted to trade Cocoa.
As a technical analyst you don’t have to know anything about where Cocoa comes from, weather conditions, etc. As all the “true” information will be transformed into the price of Cocoa, then all you need to do is be able to read a price chart. Also, a price chart will enable you to be precise in following each part of your trading plan.
A complete trading plan can be broken down into 5 basic parts which you may already be aware of depending on where you are in your progress:
1 Identify & Analyze Opportunities
First you must be able to identify and analyze an opportunity. Analysis can be separated into 2 camps, namely technical analysis and fundamental analysis. You will be learning a little of both but the main focus will be on technical analysis.
2 Entry
In order to profit from trading you must be in the market, and determining your entry is an important part of the equation.
3 Exits
Notice there is more than one. You must determine your exit when you are right, which is also called a Profit Target, and also your exit when you are wrong. This exit will help you to protect your capital and is sometimes called a stop loss.
4 Risk/Reward
As not all opportunities are created equal, this part of the plan will help you determine whether the trade is worth taking or whether you should look elsewhere.
5 Money Management
Money management will help you to control all your assets as well as answering the question of “how much”. This part of the plan along with conquering the psychology of trading will be the most important part of your plan. This will make the difference between you making several hundreds or several millions from trading.
By being able to create a trading plan and having the discipline to follow it, you will be ahead of the vast majority of people trading in the markets. This course will help you to build a solid foundation, but it is a starting place, not an end all.
Learning anything is a continuing process, and the longer and harder you work at it, the better you become. You must practice the concepts you learn over and over again until you grasp them, and then you must learn other techniques being taught. It might take you 6 months, a year or longer to paper trade your plan before you are ready to go live. Paper trading is simply trading an account on paper without using real money. It’s a great learning tool.
After you have applied what you learn through Papertrading and traded the FX System to learn the Disciplines and Psychology of trading, you will be a lot closer to achieving your goals, whatever they may be, and on your way to becoming an independent trader.
In the Recommended Reading section, there are many books to choose from to further your education. Each and every one has something of value amongst a lot of information that will be of no value to you. One of the major advantages of completing this course will be in understanding and distinguishing between what is important and what is not, saving you time and money in the long run. There are many ways to learn how to trade; this is just a great starting place for building your foundations efficiently.
The Crush Library is full of books to help deepen your knowledge of the tools you will be learning throughout this course. As a student of Crush Pro Trading you are welcome to check these books out.
There is always a risk of loss in trading.