Online Futures Trading
Trading Can't Be Taught Like Professions Can
& Buying Systems, Trade Seminars and Trading Books
You may look at hundreds of trading systems, cheap or expensive, study with dozens
of gurus, genuine and fake, or spend the money and time on reading hundreds
of books on trading and investing.
All of these trading tools have, in my opinion, only one value for most people. They
teach you you cannot really use them. And that is a great lesson, which
you will never learn until you have learned it. What do I mean you cannot
use them? Simply this.
Trading can't be taught the way carpentry, flying jets or neuro-surgery
can.
What this proves is that selected people can be taught a skill, and among
those a few turn out to be really good it at. It's the same with carpentry,
jets, law or surgery -- one out of 10 are truly first rate -- the rest
are mediocre to disasters. Trading the markets is the same.
The oft cited numbers are that 90% of traders loss money. The other 10%
take the money the losers lose. After a while, the true value of looking
at many systems, methods and philosophies, is the learner begins to find
what it is that begins to fit his or her own personality.
You cannot buy success. You have to make it yourself. It comes from within.
You cannot buy success in a trading system. What works well for the honest
vendor and there are some they will give you copies of their brokerage
statements and this will not work for the average system or method buyer.
The buyer will do one of two things. He/she will not take all the trades,
or will take them all until a bad spell hits, then give up. The buyer's
personality is not the vendor's. What the vendor's record says, this system
worked for this vendor during this period of time. That's completely all
it says. It says nothing about how it will work for that buyer in that
different time and place. There are as many trading methods as there are
personalities trading in the markets.
In St. Paul's day, the Greeks used to walk around the agora and ask each
other in the power language of the time, "Quid novi?"--what's
new? It's so easy to discard an old system and try another new one instead
which promises your money-back in 30 days if you don't find success. I
am afraid many traders do this their whole lifetimes.
The few who break out of the pattern finally stop walking around the
agora trying everything new, withdraw into themselves and build their
own, usually simple, trading approach which, eureka! works well enough
to make them a living or a fortune. They are the one out of 10 persons
mentioned above.
Another very important point, even if you join the limited group of successful
traders, there come periods some of the time when what you do doesn't
work at all well. For some traders what they do doesn't seem to work any
of the time. For others, it comes and goes.
Coming and going suggests possibly a cycle or cycles in your own personality
behavior or in the way in which from time to time you probably unconsciously
change your inter-reaction with the markets. There are not only cycles
in the market. There are cycles in the way you respond to the markets.
I double that they can be stopped. The best thing you can do is step back
and observe both of them, yours and the market's, as a third-party observer,
and relax into keeping them in balance all the time.
I read an article by a student trader who started out in 1987 and made
all the classic mistakes, spending and loosing a lot of money. In his
relating his story, he went right by his biggest mistake of all. At one
period, he simply withdrew, stopped trading, and simply studied the markets
for a year, then recommenced trading and ran his stake up to four times
what he started with that time around.
Then he made his mistake. He figured he needed more education. So he
spent thousands of dollars with a series of individual gurus the kind
who invite you to spend a couple of trading days or a weekend with them
personally, one on one until all the money he had made was gone. That
was his biggest mistake of all: not stopping when he found for himself
a system that worked for him!
The "quid novi" syndrome had set in. He had to find something
new and better. Now, he is still looking, like most, at the next new thing
(for him, astronomy and planetary data--more on that in a minute). His
saga is Everyman's. Looking, looking. Wise traders say there is no "Holy
Grail. We don't believe them. Just keep looking. It's there. Someone has
found it. And I will buy it from him. Isn't it wonderful that he would
sell it to me! What a guy! Or I will find it myself.
We flew to the moon, didn't we. For thousands of years, everyone knew
that couldn't be done. Then someone did it. The parallel stops cold right
there. There are a number of limited, different ways to get to the moon.
But all of them are buildups from the fixed, clear laws of physics and
chemistry.
Like carpentry, neurosurgery or jet flight. There are only a limited
number of ways you can do these things ... because they are in the physical
realm. Same with the profession of Law. It has a fixed, codified stricture
within which its practitioners wield their skills, or lack of them. But
with trading, the only physical structure is the exchanges and the pits
wherein each participant's unique personality offers his or her own unique
expression. That's what can't be taught.
What's the value, then, of all the stuff beginners and some veterans
also buy, and go to, and look at? They offer pieces of patterns which
may eventually fit, transformed, into the trader's personality. They are
sources for bits of ideas out of which a trader may create his own unique
trading approach to the markets, an interior part of him that he is comfortable
with, and that he makes money with.
Like everything else in the universe, the markets are constantly changing
and evolving and constantly remaining the same. Adapt or die, as they
say. But the adaptation must be a consistent personality match of yourself
with your chosen course of action. You can't buy that. You have to elicit
it from within yourself.
As a footnote, planetary data is worth paying some attention to. This
thesis may, or may not, fit your personality. No doubt it does work for
some because it's a personality fit for them. Others think it's all investment
quackery. It's not my place to debate that here. However, I offer a few
comments.
One senior international portfolio manager I know has gotten excellent
results using planetary correlations. But a big problem from my viewpoint
is there has been very little rigorous literature on the subject. There
are some short trading records all hypothetical that I have seen, but
they suffer from the same limitations I mentioned above and they are valid
only for that one trader during a given specific period.
Most of the literature is just promotional hype without scientific
statistical backup. One exception: I came across a book years ago which
is now out of print by Clifford C. Matlock, titled Man and Cosmos. It
is an excellent treatise on the whole subject of stock prices and planetary
excursions, rigorously statistical and elegantly presented.
Don't let the title put you off. The essence of the book is what happens
to the stock market when each planet makes certain aspects. Matlock was
a career diplomat with the US State Department and served in various capitals
around the world after graduating from Stanford and Harvard.
He found the time to develop an amazing body of factual research into
the subject. The book is extraordinary. Well worth reading simply to broaden
one's trading horizon even without any idea of attempting to apply its contents
to the business of trading. He gave me several copies some years ago,
and we still have a few left.
reprint permission from
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