Over the years, I have observed a whole lot of traders looking for the secret that, once revealed, will lead to riches. The search often seems to be directed to a way to find the perfect candidate or a "can't miss" strategy known only to some chosen few. I remember a husband and wife who studied with me back in my seminar days who I believed were convinced that I was holding some secret back from them. In fact, one day, the husband got me in private and asked what the secret really was. I laughed, thinking there was no secret, but now I know there definitely is a secret that can really help.
As I mentioned in the article last week, I'll be speaking at the Scottsdale/Trading Group next Wednesday, January 20th at 7:00 P.M. In thinking about my upcoming presentation, I decided I'd talk about the elements of what I believe is the secret to successful trading. If you live in the Scottsdale/Phoenix area, I hope you get a chance to attend.
However, even if you aren't coming to that presentation, there is no reason why I shouldn't reveal the secret as I perceive it to you as well. I must caution, however, that there is no guarantee that the secret will work, but I believe that use of the secret be a piece of very valuable information. Nevertheless I am sure that many will be disappointed as I disclose this secret because, like many secrets, once known it looks obvious and easy.
Secrets often are simply a revelation of something that may be quite apparent with a little thought anyway. Consider, for example, the illusions of a magician. Seeing the lady sawed in half may be astonishing until we are shown how it is done and then it is obvious and easy though maybe a bit clever in concept.
I know, I know -- enough! What is the secret. For me, the secret is that the successful trader always returns to basics. She has a plan for money management, a minimum requirement for potential reward to risk, an exit strategy, discipline, and study. That's the secret. In my estimation, those things are critically important to sustained good trading and are often overlooked, by-passed, or forgotten in the quest for some non-existent secret holy grail. That's it. That's my secret. Basics in trading are absolutely invaluable and are far more important than specific strategies or algorithmic systems.
I hope you forgive me for the tease about revealing some hidden secret. I do believe this is an important secret but wonder how many readers were hoping or anticipating I was going to write something much different when I wrote that I was going to reveal a secret of trading.
Incidentally, the Scottsdale/Phoenix Trading Group to whom I'll be speaking on Wednesday the 20th will meet at The Inn at Pima, 7330 N. Pima Rd., Scottsdale. It would be a good idea to let them know you are coming and please introduce yourself.
by Bill Kraft, Editor
Copyright 2010, Makin' Hay, Inc.
All Rights Reserved
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