Common Sense Methods to Inexpensively Get Started In Trading the Financial Markets
by
Dave Walters
Copyright 2011 Dave Walters,
All rights reserved.
Published in eBook format by eBookIt.com
ISBN-13: 978-1-4566-0660-2
No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.
INTRODUCTION
It is important that you realize I am not an affiliate of any trading company, course, advisor, or mentor in any way, shape, or form. I am a retired market trader that has always been disappointed and even appalled by the courses offered online, and their methodologies in getting customers to buy. Therefore, you will not be getting any specific websites, courses, or trading book purchasing recommendations: if I did so, it would be taking advantage of your trust in me, and I won't do that.
This is not a full course on every single method and vehicle for investment, trading method, or psychology needed for trading. To do so would require many books, and would waste many years of my time in writing material which already exists. Rather, this is a guide for you to properly choose what suits you, to go out after something which you find interesting, may have a knack for, and fits your trading budget. As it is, everything you need is out there for free or very reasonable if you know how and where to look. I will show you how to find it later in this text. You will also learn methods on how not to get ripped off for a complicated course that you don't have time or ability for,and provide options that you likely never heard of.
I can state with confidence that almost every specific "Trading Course" or book out there is a rehashed version of an older version. There really isn't much new under the sun. I could easily reword some course I got online, fill it full of trivia and "fluff", make big promises and sell it for $77, $97, or hundreds or thousands of dollars, but doing so is not honest.
One e-book I have seen recently is 55 pages in PDF, costs $300, and the first 16 pages are the guy's life story, his family history, introductions, and indexes – nothing that anyone cares about or is helpful in any way to anyone. At $5.50 per page, it's costing people $87 for useless information,and the rest you can find for free online. I won't waste your time or money in the telling of stories that won't help you nor do you care about.
To give people who may be in desperate financial straits false hope is just wrong and will only set you up for failure- I am not making any promises about your chances of success. But I'm sure you've seen products along the lines of: "Start with $500 and be a Millionaire in 18 Months trading!!!" or "Make $1500 a Week Trading Only Five Minutes a Day!!!!" It's unfortunate and shocking that sellers take advantage of people, though I know many people are desperate. A 3 page or 3 day course that promises to give one the income of a doctor (who schooled for 10 years) within a month is untenable.
Looking at statistics, in professional sports of those who attempt to break in, less than 5% actually make it and many of them only last a year or 2 or 3 and then disappear to the minor leagues. I've looked into medical, law, business, and various other schools, and the amount of students who actually finish and succeed is quite small. Have a look at businesses, restaurants, manufacturing businesses: 80-90% fail within 3 years.
My personal history is that I grew up on a farm, and learned early on that hard work and perseverance generally paid off. I also learned that often times things did not work out, due to unforeseen circumstances. And also learned that often times I was just plain lucky.
But the most important thing I learned is to not mistake my luck for excess cleverness, nor my losses as a failure. When it comes to the markets, often you are but a leaf in the wind. The successful traders are those that recognize when a wind may blow up, see when it may stop, and accept they are never always correct.
I got into trading the markets via the car industry,moving cars from the USA to Canada,and vice versa- taking advantage of differences in the currency rates. The problem is I would either be run off my feet working,or absolutely idle based upon the changes in the currency rates. Then I decided to look into just trading the currency (which is what I was doing,but using cars as the intermediary) I did that for 4+ years, staying up all night and most of the day to trade various markets and made enough to retire. Mostly Forex/currencies and E-minis with a lot of stock options and gold thrown in.
How all this applies to you? You need to trade something that interests you and suits the way you think and can fit into your lifestyle. You may not have started your own business, or been an entrepreneur but you can learn how to get that mindset – it will just take time.
Here are two golden rules of trading that you need to know and abide by with absolutely NO exceptions. If you do otherwise, I’m warning you that you are setting yourself up for failure. So please, don’t fool yourself…
1.NEVER EVER trade with your rent/food/mortgage money. The same with using credit cards to fund an account.
2.NEVER EVER risk being out on the street or having your family starve because of a bad trade which will happen. You'll be trading with your emotions/desires/hopes/needs at the forefront which will just about guarantee failure. Or the market will just go against you. NEVER risk more than 2 to 3 % of your account on any one trade- so if you go down that amount,just liquidate the trade and live to trade again.
Trading in these conditions is just gambling-you have better chances going to a casino, playing roulette and betting on one color. Honestly.
Contemplate this: among those who start trading, after one year only a small percentage will have made money. Are you in that small minority? The only way to know is to try, without spending or risking a lot of money. For many traders, it takes them years to get profitable.
REALISTIC TRADING REQUIREMENTS
Many courses being sold out there don't and won't tell you up front that you generally need a well-funded trading account in order for their system to work. Some may require several thousands of dollars to offer any profit potential. If you are using leverage in any way, you may also need a decent credit rating which may vary between brokers.
All the course sellers care about is getting your check and maybe doing some chat assistance until you give up. They will offer a "money back guarantee" but it's usually so convoluted with restrictions that most people give up. Or they will say you didn't follow the rules properly. Maybe after a while they will close down, and reappear with a new name and sell the same old stuff.
The more money you can start with, the better . When you are trading with small accounts, $3000 or so (if the broker even lets you, depending on the trade), often times the costs of trading (margins, round trip brokerage fees) really add up quickly. Even if you are a decent natural trader and doing small profit trades (scalping) depending on what you are trading, you often times make little or no money due to profits being eaten up by fees. That's
