Your Questions About Successful Trading Plans

Paul asks…

Has anyone out there started a graphic design business without formal training?

Have any self-taught graphic design artists been successful starting a graphic design business? If so, please tell me how you got started.

John answers:

Starting your own design businesss is a good idea, but planning before you start will save you a lot of pain down the road.

You’ll need a pretty sharp portfolio and a website. I might suggest focusing on a certain area or market — for example, do you want to do identity? Web? Packaging? Advertising? Or D, all of the above?

The real key to generating cash flow and being self-sufficient is being able to sell yourself. Make connections.

If it’s a little scary to jump in head first, you might try contacting all of the design firms in the area for work. Firms and agencies like to outsource production and smaller design jobs to freelancers, and it’s a good way for you to earn a little cash while you build up your own client base.

If you are versatile, meaning you can do both print and web, you will be able to offer a better value to your clients.

A couple of books that have helped me in the past are:

Entrepreneur Magazine’s Start Your Own Business
This book gives you practical advice on starting your business. EXTREMELY thorough. It gave me more info than I needed to start my business.

You may have read Rich Dad Poor Dad, the NYTimes bestseller, but I actually found one of Robert Kiyosaki’s other books more helpful. It’s called, “Before You Quit Your Job”
This book, I warn you is a little more theoretical about overall business, but it helps as a supplement to simply providing design and marketing service. It talks about process, systems, failure and success, and it has good tips on copyrighting, accounting, and retaining your trade dress.

A business plan isn’t as critical for a design business, but it’s certainly a good exercise to go through. It will tell you what you need to make to stay alive, what your financial goals are for the year, some Plan B’s if business goes bad, and other important issues. Some other things you might need:

A business license, maybe a fictitious business name, depending (or you can work under your own name and skip this).

Get yourself some basic accounting software like Quickbooks or MS Money. If you’re not comfortable you might try a basic accounts book from Staples, around $10/ea. It’s a good idea to separate your business expenses and receipts into a separate file folder for tax purposes. (You may even need a separate bank account, that helps too.)

That’s all I can think of right now, but if you have any specific questions, feel free to email me. Good luck!

Jenny asks…

What is the best strategy to trade on forex?

I have a forex account and would like to know that people think is the best startegy to employ in the current market conditions?

John answers:

If you have an account open and have begun to try to trade, then you’ve seen there are literally thousands of trading methods and indicators and signals and setups and triggers to exponential infinity if you begin to combine them.

There is no single “best” strategy. I know this is not what you want to hear, because your question presumes there IS a best strategy. There is no crystal ball or pot of gold at the end of the rainbow. That may seem harsh, but I’m going to beat you over the head with this because you must understand in advance. There is no certainty, and the future will always be uncertain. There is no one best book or webinar or seminar or single answer or holy grail. The best we can do is give ourselves a small edge over 50% certainty, then use good money management to control losses if we’re wrong. There are hundreds of “best” systems that work. You may have a simple trigger to enter the trade, but the setup is always going to be a combination of things. If you can’t juggle several things at once, if you can’t remember what it did before and don’t have a good memory, forget it; give up. If you can’t handle the fast pace, constantly changing, stressful environment, just quit. And if you don’t address your psychological inhibitions and address your fear/greed and honesty disorders, you will not succeed. For example, people that need to be in control, like lawyers and doctors, are the worst traders. So far, you have failed to see that there are many more issues to becoming a trader than the system or computer.

Each trader has to discover on his own his particular style and time frame and methodology. Joseph Granville said he could give you 10 successful trading systems, but you still wouldn’t make money because you wouldn’t follow them. You cannot make a duck into a good runner. He’s a swimmer.

I’ve found literally hundreds of good trading systems, that seem to trade well in backtesting, that I can show you phenomonal profits on years of historical charts, but I can’t trade them. Most of these require you to be glued to a computer screen six hours a day, focused and ready full time, which can’t be done. Many people try, 90% fail. I get bored, or distracted, and start checking email for just a minute or two, and the trade has broken out and extended. Rules do not allow to chase price in most cases. Or worse, I simply can’t hit the button because it doesn’t look good or whatever, hesitate, and miss the trade. The battle is in your head, not with a computer or system or the market.

The answer to your question is to read everything you can, find what works for you, develop a trading plan and test it meticulously real time. You will find something that seems to click for you, and you will probably modify it to suit you, making it your own.

In general, it is more profitable to trade with the trend. But this in itself is part of the problem; which time frame? Only you can answer that question for what suits you. It goes without saying that you can’t trade leveraged trades without a stop, so you must learn to define your risk with your stop loss order, away from key support and resistance levels, away from where everyone else places their stops, or they will work against you. So you’ll end up taking more risk than you intended, which seems to make it less likely you can trade a leveraged position, so decrease leverage or get in sooner.

Moving averages and trendlines are good support and resistance levels, as are pivot points and fibonacci levels.

Sandy asks…

Describe the totalitarian state under Stalin. What methods did he use to achieve such control?

what was his justification for such methods, and was he successful in reaching his goals?

John answers:

First of all I would define what features a totalitarian state has:

I would argue that all totalitarian regimes contain at least 5 features:
1) The regime must be a one party state
2) The regime must use terror as a political tool
3) The leader must have total control over his subordinates, through political and extra-political means (meaning that they must use fear even on close allies)
4) The regime must control all, or nearly all aspects of the economy.
5) The regime must try to control all aspects of human relations, from trade unions and politics to social groups, education even to marriage and youth groups.
(There are plenty of other models of totalitarianism, but the above is possibly the simplest and clearest)

Now I would examine the Soviet Union under Stalin to see if it fits the model.
1) The Soviet Union had been a one-party state since 1918 when the Socialist Revolutionaries walked out of government in protest at the Treaty of Brest-Litovsk ending Russia’s involvement in WWI.
2) Stalin certainly used terror as a political tool. Lenin had also used terror, but under Stalin the system of informers, political prisons, show trials and arbitrary arrests became institutionalised,
3) When Stalin became General Secretary of the Communist Party in 1922 he used this post to promote his allies and demote or expel anyone (and their supporters) who were, or were suspected of, being against him. He turned a seemingly unimportant post into an instrument to gain and maintain his position.
4) Before Stalin the economic system was mixed, in that it had both state owned and private owned businesses and farms. Stalin changed that. The Five Year Plans and Collectivisation of Agriculture policies put all the means of production (with some, small exceptions) in state ownership. The organisation Gosplan was responsible for drawing up plans for each sector of the economy – how much each farm, factory and mine should produce.
5) Under Stalin the party did try to control all aspects of human relationships. All organisations had to register with the party, and, if large enough, have the party oversee their activities. This applied to everything from factory social clubs to knitting circles and folk dance groups. Youth groups were reorganised by Komsomol (young communists) and the Pioneers (sort of like scouts – but with extra communist propaganda) and churches had to register the names of their congregations. Secular marriages were encouraged, religious ones discouraged. Propaganda reinforced the message.

Stalin’s justification was that he believed in the “inevitable” march of history as described by Marx. He saw that history proceeds in stages, with violent struggle characterising each shift in development. The Soviet Union needed to rapidly pass through stages to reach communism, so the class struggle would, inevitably, intensify.
He also thought that supporters of the former regime, or other anti-communists, would try to wreck the gains of the revolution, so all people needed to be aware that the regime would fight to preserve the “workers’ paradise” that was being created.

See:
Stalin, A Biography, by Robert Service

Maria asks…

How much would I need to move from england to las vegas?

I am looking to move to vegas. I am 20 and an electrician so its a trade how much would I need to fill my dream

John answers:

Some true but discouraging facts here…first…unemployment is extremely high in Las Vegas and people are fleeing the city. Second…you cannot just move to America. You must apply to immigrate and that is nearly impossible. You must have an Amerian relative here to sponsor you…and it takes years. Or, you must be highly educated and skilled in a rare field of work and find an employer to sponsor you…and there are thousands of unemployed carpenters…so that is not going to happen. In reality, you just cannot immigrate to the U.S. You have the entire E.U. Open to you…tho i do not think the situation is better there. Every year about 15 million people try to immigrate to the U.S. And about 50,000 make it…mostly by family immigration. Some days I think the entire population of the UK wants to move to America…flattering, but just not possible. Life is tough everywhere right now. Hope you can find a new plan that will be successful for you.

John asks…

What percentage of day traders make enough money from day trading to make a living?

Also, why is the percentage so low? Thanks a lot

John answers:

Unless the traders are in the business or were in the business, the percentage of them making a living from trading is very low.

For those that have less than 3 years of trading/investing experience about 95% of them are loosing money consistently and will continues to loose until they quit.
For those that have at least 3 years experience and are studying constantly at least 50% of them are doing decently but not sufficient enough to make a living.

Very few amateurs are willing to work at being a good trader/investor, Most of the are looking for the “magic” system or the website that is going to guide them to millions, and there isn’t either. Many people do not have the fortitude to study for a long period of time to be successful.

There are many professional traders working in the industry. At least 95% of those that work on the floor can make enough money to live very nicely. 75% of professional in-house traders can and do make money and like floor traders, make a very nice living.

To be a trader you must have at least four major concerns addressed and very strong discipline to follow them
1 – You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don’t try to out-smart the market, you’ll loose but if you always take what the market is willing to give you, you’ll be successful. Other words, you don’t trade against the trend.
2 – A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away – don’t loose more than you need to and don’t be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can always average up
3 – You must have sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you trade/invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it.
4 – A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them.

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