It just happened again. I got a note from a student about a trader who took some fancy smacy training and thinks he KNOWS where the market is going. Says that these guys he is training with now CONTROL the market, or at least know who is, and exactly what they are going to do and when they are going to do it (funny thing is, I’ve heard him predict the market on many days and it did the exact opposite of what he was claiming was a sure deal).
Anyone who has ever read Mark Douglas’ “Trading In The Zone” knows better than that.
Sure, there are Wall Street firms that play games with the markets, but even Goldman Sachs could not turn around a spiraling market even if they tried.
If anyone thinks they KNOW where the market is going for sure, then the market is about to teach them a great lesson!!! If you think you KNOW, then you don’t take precautions. This is something I learned a LONG time ago, and Douglas covers thoroughly in his book.
Another well known author, Joe Ross makes this statement:
“When asking yourself or asked by others which way you think a market will go, you should be able to answer, “I don’t know, but by following the market’s own action and my own analysis, then more often than not, I will be positioned appropriately – even if that position is one of standing aside.”
You had better have some protection in, like what is built into binary option trades, or stops behind our futures trades. And, when I get into profit, I’m taking some – I’m not going to let it become a loser – as many a LONG TIME trader can attest to – such as:
Douglas Zalesky 25-Plus-Year Trader (in his great article – “25 Trading Tips”):
Tip #4: Never Turn a Winner Into a Loser
“The market has rewarded you by moving in the direction of your position, however, you are not satisfied with a small winner. Thus you hold onto the trade in the hopes of a larger gain, only to watch the market turn and move against you. Of course, inevitably you now hesitate and the trade further deteriorates into a substantial loss.
Opportunity exists in the marketplace all of the time. Remember: No one trade should make or break your career. Don’t be greedy.”
I also love his tip (all 25 are great) # 19: Hit Singles Not Home Runs
“Just as I don’t know of any successful speculators, I don’t know of any trader who goes into a trade expecting to hit a home run and then actually having it happen. You should never approach a trade with the idea that it’s going to be a huge winner. Sometimes they turn out that way, but the times that I have hit a home run on a position is most definitely luck, not skill.”
No matter what type of trading you are doing, if you find someone who claims they KNOW where the market is going next, RUN the other way!