Before launching into this weekend's article I want to thank all of you for the kind outpouring of support following my article last weekend. In addition to offering your support, a number of you suggested I not take personally attacks such as that I had received from Mike and I certainly agree that that is generally good advice. There were three reasons I did take the attack personally and responded to him. First, the false allegations were addressed specifically to me, second, they directly impugned my integrity and honesty, and, third many members may not know my background and that I do trade for my own living. I believe members are entitled to know those things about me so there is no chance they buy into the falsehoods contained in Mike's "contribution" to the blog. In the future I shall try to refrain from responding to attacks unless I believe they might unfairly, unjustly, and dishonestly influence other subscribers. In any event, I am deeply moved and sincerely appreciative of those who took the time to come to my support. Thank you.
Many of the comments on the blog last week suggested that Mike may have written because he had been burned by other services and that it is very difficult to know what services are authored or edited by someone who actually does trade their own money. I believe that is a very valid consideration. It led me to consider some of the factors that lead would-be traders to become losers who are disenchanted with the market and with many of the so-called gurus. When I use the term "loser" in this article, I don't mean loser as a human being, I mean loser in the market. Unfortunately all too many retail traders fall within that category and it may be worth exploring some of the reasons that may have led to that status.
One reason some become disgruntled losers is simply their own laziness. They sit back and attempt to follow trades on some service with real money and then blame others for their own failures. In short, although they put their own money at risk, they are completely unwilling to take any responsibility for their own trades. A losing trade becomes the fault of someone else even when it was they, themselves, who made the play. In my estimation they use what little information they are willing to get inappropriately. They follow blindly and without a thought to gaining knowledge. They are motivated by greed, seeking only the quick buck without regard to learning how to trade.
I have long argued that the appropriate use of a service is to gain knowledge and experience. There is no reason in the world to follow any service or guru by blindly putting your money at risk. One ordinarily pays for a subscription service and that is part of the cost of a trading education. In my view, it should be used in precisely that fashion. When one subscribes to a paid service, it seems to me that the subscription should be used as an educational tool. Start, perhaps, by following the trades as paper trades. See what prompts the "guru" to enter a trade, observe the exit strategy, see how the trades are doing, learn how the trader trades. Only when the subscriber has gained an understanding of what the successful trader is doing should he even begin to consider placing money at risk.
All too often subscription services are offered by people who do not trade their own money. Losers are completely willing to follow the lead of non-traders who offer a service and then are upset when they put their own money at risk and lose. Trading is risky; it is dangerous. Ready, fire, aim is not the way to success. Practice and the acquisition of knowledge is a much more sensible approach. I understand that many folks simply don't have the time to devote to an in depth study of trading and it might just be in their best interests to exercise a little patience. They can still learn, but, perhaps, at a slower pace. It seems to me that approach may work out better than losing at a fast pace.
There are a lot of strategies available in the markets. In my latest book, "Smart Investors Money Machine," I discuss a variety of ways to add income to one's life. I discuss some ways that require less time and effort and others that definitely require a lot more time, effort, and study. The first step to avoid falling into the loser category is to understand your time limitations, your level of knowledge, and your real interest in learning to trade. Successful trading does require time, study, knowledge, and personal responsibility. Step one to success, I believe, is to understand that each of us is the only one responsible for the trades we make. When we win we can praise ourselves; when we lose we have no right to blame others -- that's what the losers do.
by Bill Kraft, Editor
Copyright 2010, Makin' Hay, Inc.
All Rights Reserved
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