FuturesTechs Blog

Hi All,

Just a quick note to those who are looking for educational courses and training related to trading.

A word of warning: There are a lot of courses on offer that are long on sales pitch but short on useful content once you sit down on the day. I have come across many clients who have been on these sort of courses and came out more confused than when they went in.

If you read that someone has read loads of books on trading would that encourage you to listen to what they’re saying? I didn’t think so, especially where trading is concerned. and this is one of the biggest problems with seminars/training course on trading: They’re not run by successful traders. In fact many of them are run by successful motivational speakers who make you feel great, but teach you little about the realities of trading the markets, and the swings and roundabouts you will inevitably experience as a trader, however much experience you have!

They’re not run by successful traders, because succesful traders don’t need the money, quite simply because they’re successful traders, and they wouldn’t want to waste time training people when they could be using that time trading, and making more money!

So that presents a problem if you’re looking for a training course. What can be done then?

The best advice I can give is get to know a network of people who are trading or interested in trading. Go to the message boards (like Trade2win) and attend the conferences (like the IX Investor Show or the World Money Show), and create your own network of people who have been through this process. They will tell you there’s no “quick fix” and no fast money to be made in the markets.

Remember the old adage “If it sounds too good to be true, then it probably is”. Adverts that suggest you can become a Millionaire with just 20 minutes work a day surely come into that category.

But you can make money trading, and a decent start, in the shape of a decent training course from a decent provider, can save you much more money than just wading in, losing you money to the markets. There will be plenty of time to learn trading lessons with real money, and trust me these are often the most valuable lessons!

The point of this Blog post is to put forward one of my suggestions if you want to learn the ropes with a trusted, professional provider of trader training. David Norman at the Trader Training Company has been doing this for many years, and has put together a really decent programme that helps you understand all aspects of trading.

I would strongly suggest you GIVE YOURSELF A CHANCE to make money in the markets before you start to trade heavily.

Click here to go to the link on our website for the up-coming “Boot Camp” at the end of April. I am doing the Technical Analysis module, around 6 hours of Technical Analysis training over two afternoons, covering basic principles, different chart types, Candlestick analysis, momentum indicators, and practical application.

Cheers,

Clive.

PS. The book got a review on Page 73 of this week’s Investors Chronicle. Here’s the link: Three winning traders’ guides

We have had our web offering up and running for a few months now and we’ve been speaking with plenty of private traders of all different levels of experience. We have heard a few stories of people losing lots of money, and still not really feeling that they’re swimming above water.

Many of these people got signed up to training seminars that are advertised with lines like “make £50,000 a year for just 10 minutes work a day”. And there’s our first “tip”: Does that sound too good to be true? What do they say: “If it sounds too good to be true, it probably is!”. Come on! You’re intelligent people. Also if you see someone trading a “live” trading system, make sure it is live. And think about this: If I had a trading system that was whiz-bang nailed on money making and amazing, would I tell anyone about it?

Now consider this: There is a school of thought that 80% of traders who Spread Bet lose money. There is another school of thought that Spread Bet firms move the market to where your stop is and knock you out of trades. Are you sure? Most spread bet quotes are based on the underlying index. The spread bet firms’ highs and lows are matched to the underlying almost to the tick. So they’re not moving the market up and down to try and trigger your £2 stop. Please!

There are some very important disciplines you need to exercise before you start trading. Here are just a few that I can think of off the top of my head.

Start off small. Why give away all your money while you are learning to trade.

Understand and utilise Risk/Reward. Whenever you put a trade on make sure you’re aiming to make more money that you’re prepared to lose. If you always do this then you can lose as many time as you win, but you’ll still make money. If you try and make three times what you’re prepared to lose (known as a 3;1 Risk/Reward ratio) then you can have 7 losing trades out of 10 and STILL make money. Technical Analysis is the best tool for working out when you are putting on a trade with favourable Risk/Reward.

Never bat against a strong trend. Why do people feel the need to try and buy something that’s falling like a stone, or sell something because it’s really strong? This is one of the biggest mistakes new traders make. Don’t try and trade against a strong trend. We look for Candlestick patterns to suggest trend changes, then wait for confirmation. We saw a Hammer on the FTSE Futures chart last Wednesday, but it wasn’t until Friday that we started believing there was more upside to come. Even now we’re not getting too carried away, and have reasonable upside targets, because the Bears could wake up at any minute.

We are currently looking for the recent pullback in Oil to do a bit more. But we’ll soon change our minds if the positive candles start to appear, and the smart money will be made by getting long once this happens and riding it back to $147.

Find one thing to trade (at a time) and learn it’s personality. Different markets behave in different ways, and you may need to spend the early months discovering a market that suits you. You will all have different approaches to risk, volatility and the like. You will also have to skew the type of product you’re looking for towards how much time you can devote to it. I would suggest that something like the DAX Future or the S&P 500 would require a lot of attention, whereas something slightly less volatile may suit those who don’t have time to watch it’s every move. Yuo may need to try a few different things before you find something that appears to work for you.

Be well capitalised, and don’t risk it all on one trade. There is no point trying to turn £200 into £2000. You have a much better chance of turning £2000 into £20000. With £200 in your account you run a good chance of doing your dough in the first few trades. Many firms offer a dummy account or a “training account”. Good idea. Take advantage. Press buttons. Make mistakes. Then start risking your own money once you’ve got a few of these mistakes under your belt. Once you do start trading don’t risk all your capital on one trade. This isn’t the Casino where you get your pile of chips and stick it all on red because you fancy a Gin and Tonic. This is a business (well it could be if you take it seriously).

Manage your emotions. Trading can be an emotional business, and you need to make sure you can manage or control this, otherwise you will make decisions with your heart and not your head. Many professional traders spend lots of time making sure they’re in the right frame of mind to trade. A good way of doing this is by putting together a plan at the start of each day; collating your ideas. Then you have something to refer to. You can “keep it sensible” and not allow yourself to start making baseless emotionally-driven decisions.

This is just a few thoughts that may help you along the way. I’m sure future blog posts will expand on this theme as I think it’s extremely important.

I’ll sign off with one more thought, which kind of follows on from the previous point: Have a strategy. If you’re trading is based on “I bought it ‘cos I thought it was going up” then you shouldn’t be trading. Again this is where Technical Analysis can serve a trade so well. It gives then something to reference off in the decision making process. This is what Futurestechs does for many professional traders, and what we hope to become for many more of you; a useful reference point and a good building block towards a successful trading career.