Your Questions About Successful Trading System

Maria asks…

Examples of successful capitalism?

What time periods are examples of successful capitalism? (country would help also) I’m looking for a period with less unemployment, more wealth, an increase in the standard of living, etc.

John answers:

Capitalism is an economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled. Through capitalism, the land, labor, and capital are owned, operated, and traded by private individuals either singly or jointly, and investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy. A distinguishing feature of capitalism is that each person owns his or her own labor and therefore is allowed to sell the use of it to employers. In a “capitalist state”, private rights and property relations are protected by the rule of law of a limited regulatory framework. In the modern capitalist state, legislative action is confined to defining and enforcing the basic rules of the market, though the state may provide some public goods and infrastructure.

Sharon asks…

Do trading strategies/systems work?

John answers:

Some do, yes. However, trading methodologies are tremendously varied, and any one individual’s implementation of a methodology may be very different from another’s, even if they are nominally following the same methodology.

Some of the key components of a successful strategy or system are as follows:
1) Use only objectively definable and consistent criteria for entry, exit, and stop points
2) Avoid subjective valuations
3) Trade the long side and the short side, without preference
4) Employ strict risk management and money management to limit size and risk of any one trade to a small percentage of a portfolio
5) Keep emotions out of trading decisions

Robert asks…

Does anyone know if the Daily Trading Forex system by Loz Lawn is all its cracked up to be?

John answers:

Interesting answer that someone posted about saving your money, but put it this way just because a system works, doesn’t mean its going to make you a millionaire. A successful trading system is about growing your account over time. Even successful traders aren’t millionaires. You think every trader for the banks are millionaires? No, probably not, but most of them have a trading system that works.

Same goes for many independent traders. They have successful systems, but aren’t millionaires. It takes time to grow wealth and just by have a system that works, doesn’t guarantee wealth. You still need to execute the system correctly and accurate over time.

People who say this kind of stuff are just negative people. They may have tried one trading system in the past and it didn’t work for them so they write off all systems.

But to answer the question at hand, Loz Lawn who is the creator of the Forex Daily Trading System is a 12 year trading veteran. He has released some pretty successful products in the past and there’s nothing out there that discredits him in any way. And considering his trading is his life line for money, I would say that if he’s gone 12 years trading, then he must be doing something write.

With that being said, the system consists of 142 videos in 5 modules and also provides one on one support and a private trading room for members. Lastly, one thing to note about this system and may other trading systems. You’d be a fool to start using any system on a live account right off the bat. This is exactly why the Forex Daily Trading System and many other systems offer a 60 day money back guarantee. This allows you to test out the system to see if you can execute the system properly and make it work for you. If you find its not for you, you can simply get a refund.

When it comes to systems, its not just about having one, but its about executing it properly. A successful system is worthless to everyone if no one follows the system. So its the trader who ultimately has to make it work with a little time, effort and discipline on their end as well.

Michael asks…

Private Traders: What Trading System do you use?

Please specify, whether your trading system:
1) was bought off the shelf and what is it called;
2) put together yourself using existing indicators & techniques (ie MACD, Moving Averages, Chart Patterns, etc);
3) developed entirely by yourself as a new proprietary system.

What do you use this system to trade (ie futures, stocks or FX)?
Not fishing for the secret all infallible holy grail of trading system (if it even exists).

Just want a simple answer like:
I trade using point (2) using candlestick patterns and moving averages as trailing stops. Use it to trade FX.

Dont need to know the time period of your moving averages or secret mathematical formulae you’ve programmed into TradeStation or MetaStock.

John answers:

Do you think a successful trader is going to publish his answer to this? Get real, it ain’t gonna happen. You might get a ton of response, but you are not going to get a good one! Besides, why would they tell you? Likely they have a ton of time and money invested and are not likely to just let you fish for their results.

Richard asks…

Starting out with trading?

If I have about $1000 in capital to invest, what market do you suggest I look at? I would like to do trading on a weekly or monthly scale, as opposed to long-term investing or up-to-the-minute day trading. I have to keep in mind the cost of commissions and other fees, so a while website like OptionsTrader would be my best bet for stocks (3.95/trade), I could potentially have lower commission fees somewhere else.

I am not looking to have a huge amount of leverage, and am completely realistic about my returns (I’m not expecting to double my money or anything like that). Any input would be appreciated.

John answers:

Although you can trade/invest with $1,000 but you really should have more than that.

If you have to ask what market to use, then you are not ready to trade. What is good for one person is not necessarily good for another. Most non-professional traders trade in both the equities and options markets, those that trade fixed income usually only the OTC market for fixed incomes.

If you have to worry about “commissions” you are not ready to trade, there”s more important things you need from a brokerage firm other than low commissions – You need a firm with a good trading platform, good order routing system, and a strong operational department.

To be a trader you must first learn how to invest. You must know the products and the markets in which they trade and more importantly you must know the rules that govern those products and markets. So you must know what you’re doing, why you’re doing it, and how to do it. You should start by reading “Investing for Dummies” by Eric Tyson.

Here’s a list of books you should consider, at least read half of them
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
How to Trade in Stocks, Jesse Livermore
Millionaire Traders, Lein & Schlosberg
One Up on Wall Street by Peter Lynch
Reminiscences of a Stock Operator, Edwin Lefevre
The Disciplined Trader, Mark Douglas
Trader Vic-Methods of a Wall Street Master, Victor Sperandeo
Trader Vic II-Principles of Professional Speculation, Victor Sperandeo
Trading for a Living, by Alexander Elder
Trading in the Zone, Mark Douglas

And when you think you want to trade, try some paper trading to test your skills without spending you money

Before you enter your first order you need to address four major policies and have 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 since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose
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 go into a trade without knowing when and where you are going to get out of it. 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 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 can trade and/or 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.

Unless you are willing to study and follow the above you will never make it as a trader. To be successful as a trader it takes work and constant study of the markets and the products traded in those markets, there is no easy way.

DAVID – Once again you wrote a lot of nonsense, non of which relates to the question asked, but f you understood the business you would have known that..

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