Your Questions About Successful Traders

Chris asks…

Any successful options traders out there?

1) Has anybody every enrolled in the Australian course “Safety in the Market”? I just attended a Canberra session and it was very slick and sales oriented, plus they neglected to say that WD Gann’s son denied that Gann was a successful trader at all, plus he used astrology and also a lot of bs in his predictions. If anyone has used it, how did it work for you?

2) I understand “Safety in the Market” and Optionetics are owned by the same company, i.e. Hubb? Has anybody ever bought Optionetics?

3) Are there any successful options traders out there? What system do you use if so?

John answers:

In general avoid investing “systems”. They only people that always make money off them are the people selling them.

If you don’t know what you’re doing, options trading can be very risky. If you DO know what you’re doing, they no riskier than stocks.

A successful options trader uses a variety of strategies. At the moment, I have some short strangles, some long calls, and a bunch of short puts and short calls.

Writing or “shorting” options can be profitable, but most brokerages won’t allow this until you’ve had a lot of experience in other options trading.

Start by looking at amazon.com for beginning books (“for dummies”) on options trading. Then start small.

And the cardinal rule??? Don’t invest more in options than you can afford to lose.

Good luck.

Laura asks…

What are the principle of successful forex traders?

Tell me how to be successful as a forex trader

John answers:

To become a successful forex trader takes hard work and dedication. You first need to learn as much as you can about the forex market, what are the causes and effects. A great deal of experience is needed to consistently make profits.

The most important principles are money management and discipline. It is not greed that causes our failure as any rational trader should work to maximize their return. The cause of losses are deviating from your system and risking too much on a single trade. We can’t be right all the time and we need to be sure when we are wrong we minimize the loss.

Linda asks…

Where do successful stock traders learn to trade?

I would like to take some courses to learn how to research and trade stocks, but I’m not sure what to look for. Any suggestions? Thank you!

John answers:

I know this may come as a surprise but I think the answer is quite different from what any of the other people have suggested.

The most successful stock traders learn to trade by experience–although not necessarily by investing their own money or other peoples’ money, but by experimenting with investment in a simulated environment. People used to do this by hand, tracking newspapers, but now with computers it’s even easier.

You can take all the courses and read all the books you want, but you need to get your hands dirty by simulating actual trading in order to learn. The most important thing to remember though, is to be patient–the most successful investors think in the long term, so don’t expect to start to get a feel for how the market works until you’ve been following it for a few years.

There are three basic things you need to know in order to trade stocks successfully:

* The basics–how the market works, what all the data means, how to interpret research.
* Experience and general research–you need to have a feel for how the market works.
* Specific knowledge about specific industries. If you have specialized knowledge that gives you some sort of insider view into certain industries, this can help you beat the market. Often, the most successful investments that individuals make are ones that are in some area that they have some expertise or inside knowledge into.

How do you get these? Well, you can start by reading, but I would advise you that it would be more helpful to create an account on Yahoo Finance, and start playing around with stock portfolios. It’s free, and you can experiment as much as you’d like. You can also do extensive research on companies, looking at information about insider buying and selling, how much top officers are paid, comparing them to other similar corporations, etc.

Richard asks…

Are there investment tools that allow individuals to precisely and automatically mimic successful day traders?

Are these tools historically successful?
Where can they be found?
Which are the best?
… in other words… is there software that allows me to copy another person’s activity trade by trade?

John answers:

Very flexible interactive charting software [I use Prophet Charts, others use StockCharts, etal]; watch daily chart, 2- to 5-minute interval, 9-period EMA, slow STO, play the trend, take what is given, DON’T fight the trend or charts, cut loses QUICKLY, don’t “bet” more than you can lose — while your question was addressed to software, you must be more mindful of your innately self-destructive mind-set than your enabling software — good luck

John asks…

On Average How Much Do Successful GoldManSachs Traders Earn with Christmas Bonus?

John answers:

That’s almost impossible to answer-depends on the year- type of trading product, contribution to product area profitability etc.

But at Goldman Sachs? Perhaps you should read this!

Http://www.guardian.co.uk/business/2010/apr/19/goldman-sachs-defence-fraud-allegations

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