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April 13, 2005 � Issue #215 | |
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Trading Tip Does Anyone Day Trade Anymore? By D.R. Barton, Jr.
May Workshop Professional Tactics of Day Trading Workshop
Feature Article Falling For the Cause (Goals From the Viewpoint of Cause and Effect) By Keith Cunningham Real Estate How To Make $100,000 and How to Lose $50,000 From The Same Property By Chris Anderson
Recommended Seven Tips for Peak Performance Trading CD Listening In... Examples of Trading Goals
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Does Anyone Day Trade Anymore? Trading Tip by D. R. Barton, Jr.
-- Cicero
-- Marcus Garvey I remember back in 1999 and 2000 when I�d walk into a Bar and Grill for lunch. Most everywhere in the country, instead of ESPN Sports Center reruns, the TVs would be tuned to CNBC and people from all walks of life would be watching Bill Griffith hosting �Power Lunch.� Bar tenders and truck drivers would share stock tips with each other. And the cover of Newsweek showed a bull snorting underneath a headline that read something like, �Aren�t you rich yet?� Times have changed since then. And the masses of uneducated, gun slinging day traders have been replaced by a more sophisticated lot of folks who spend time educating themselves. And the traders of today stay in the game much longer, on average, than the shoot-from-the hip crowd of old. Next week I�ll be describing some of the inherent advantages that day trading provides. But this week, I thought you might enjoy getting into the head of the one of the best traders that I�ve met. I�ve known Brad Martin since 2000. Brad spent 14 years as a floor trader at the CME and CBOT and now has been trading seven years as an electronic day and swing trader. I�ve had the opportunity to trade with Brad and model his trading strategies over the last five years. The fruits of our efforts have resulted in two really incredible workshops that we teach together. (You can find more about the workshops below.) I�ve never met another trader who acts with more confidence and ease at his decision points. There are several good reasons why Brad�s trading is so effortless, so let�s explore them a bit. Brad knows exactly where he�ll get out if he�s wrong, before he ever enters a trade. This may seem like a simple thing, but Brad has a unwavering sense of capital preservation and he uses strict risk control on every trade. His dedication to preserving his capital is so ingrained that he never has to think or analyze anything at his decision points. The decision was made before he entered the trade. This absolute �get out point� is actually very liberating. While Brad doesn�t like being on the wrong side of a trade, he knows that it�s part of his business and he does a great job of making his losses impersonal, neutral events. Brad has a plan. When Brad enters a trade, he knows exactly what factors will cause him to get out of a trade early, what things will tell him to stick around because the move could continue in his direction, and more importantly, what things are not going to influence him one way or the other. One insightful workshop attendee (thanks to S.S.!) told the group that the amazing thing about Brad�s trading style is not the indicators and factors that he looks at, but rather all of the things that he chooses to completely ignore! Brad knows the factors that give him an edge; he pays close attention to them, and doesn�t let outside distractions influence him. Brad has confidence that comes from knowing his strategies work. For many people, this seems like a very basic concept. But I believe that most people who struggle with their trading do so because they don�t believe 100 percent in what they�re doing. Brad makes decisions look easy, because they are easy for him. Tiger Woods consistently drains tough putts in pressure situations because he�s done it before. He has a mental and physical routine that works and is proven. The same can be said for Brad�s trading. Tiger doesn�t sink every putt, and Brad doesn�t make money on every trade. But what they both do works, and because of their confidence, neither of them has to over-analyze the situation when it happens in the heat of battle. I promised you earlier that I would tell you where you can learn more about Brad and his trading strategies that work. For those of you who are interested in Day Trading, Brad and I have designed a workshop that gives you detailed written systems that can jump-start your trading. And we take you through real-time simulations to help you learn these strategies in a hands-on fashion. For more on this workshop click this link. Brad and I have also put together a Swing Trading workshop that is really incredible. It is filled with detailed trading systems that we both use. And we teach those systems by taking you through trading simulations where you apply the strategies along with us on real market data � you start building your confidence right in the workshop! For more on this workshop with Brad�s proven strategies and thought processes, click here.
Editors Note: Throughout the issues you will see certain words with odd spellings, such as Fre-edom and mort-gage. This is because spam filters are likely to block message that contain certain words and this is one solution. |
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May
Workshop...
Day Trading Workshop Dates Announced! Professional Tactics of Day Trading May 14-16 2005 Phoenix, AZ Register Soon and Qualify for a $500 Discount
Learn More ... |
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Falling for the Cause Goals From the Viewpoint of Cause and Effect By Keith Cunningham If you are like most people I know, every year about this time you begin to notice that all those New Year's resolutions you made are starting to fade and wither. Most of these resolutions were the same ones you made last year and the year before. Every year, after a few weeks, you start finding reasons and excuses to make exceptions and to fall off the wagon. When you stop to think about it, we habitually break our promises to ourselves. Numerous studies have been done to help us understand why this happens and there are some very smart people who have come up with 100�s of tricks to help us achieve our goals. I think there are two primary reasons we quit working on our goals. The first is the erroneous belief that it must look a certain way by a certain time, otherwise, we think it's not working or not worth it. We think that if we go on this diet and start working out every day, then within a matter of just a few days we will be seeing results and that the process will be getting easier. When we don't see the instantaneous results we want, our brain helps us make the decision to quit by rationalizing that this is just not worth it. Unfortunately, the root of most, if not all of our problems is the need for instant gratification and when we don't see instantaneous results, we tend to get discouraged and quit. When you stop to think about it, the world is not designed to give us instantaneous feedback - either good or bad. You don't get lung cancer after just one puff. You don't gain 30 pounds after eating just one donut, or even one donut a day for 3 weeks. You don't get into financial hock to the tune of $50,000 of cre-dit card debt in a month. You don't create a lousy relationship in just a week so it is irrational to believe that you will unwind these problems in a matter of a few days. The results in your life so far, both the good results and the ones you would like to see changed (the ones you made your New Year's resolutions about), happened as a result of continuous, daily actions. You did not go out and create the problems you now have overnight. And, you will not solve these problems over night, either. Ordinary things, consistently done, produce extraordinary results! Remember, Cause and Effect? Whenever the cause is missing, so is the effect. So, whatever it is you want in your life, check to see if the Cause is in place to produce the desired Effect. If it is, then it is just a matter of time and consistent, daily activity until you see the Effects in your life. Remember, Cause and Effect are not closely linked by time. The second big reason people struggle with achieving their goals is we all tend to fall in love with the Effect and not the Cause. Everyone I know would love to be rich and skinny and in a wonderful relationship. Those are all Effects - and they are easy to fall in love with. The secret is to fall in love with the Cause. I don't know one successful person who gets up in the morning and does what they hate. Rather, every successful person I know is doing what they love. They may not have started out loving it, and maybe every single little thing about what they're doing is not their most favorite thing in the world, but big picture, they love what they're doing. Successful people tend to fall in love with pleasing results, while unsuccessful people tend to fall in love with pleasing methods. If you don't fall in love with the Cause, you will wake up every morning dreading doing the things that will result in the Effects you desire, and I don't know anyone who can sustain themselves doing what they hate for more than a couple of weeks. If you do decide to fall in love with the Causes that will produce the Effects you want, you will achieve your goals much faster because we all perform better when we enjoy what we�re doing. Re-look at your goals from the viewpoint of Cause and Effect. Are you slowing down because you are not seeing instantaneous results? Are you waking up in the morning dreading doing the things that will produce the results you want? If so, ask yourself these questions: 1.
Do I believe I can make this goal come true? I
love what General MacArthur said: "Age wrinkles your skin.
Quitting wrinkles your soul!" A
commitment you make to yourself should be no less sacred than a
commitment you make to others! You
are in control of your destiny! Live the life you dream! Namaste
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How To Make $100,000 and How to Lose $50,000 From The Same Property by Chris Anderson, Ph.D. At our new web site, www.GetPreconstructionDeals.com, I always get one specific question sent in after we announce a new preconstruction project: �So Chris, is this preconstruction project a good deal?� . The answer that is expected back by the person is �yes this is a GREAT deal� or �no, I don�t think this is a very good deal�. Even though I am not trying to be flippant, my response back is usually along the lines of you could potentially make a lot of money from this project or you could lose a lot of money. Boy, that�s a big help thinks the person asking the question. In fact, it is quite possible that two people could invest in this project, at the same time, with one making a $100,000 and another losing $50,000 from it. If I�m talking to a person face-to-face about this, it is about at that this time in the conversation that their eyes glaze over and they really start to wonder about this so called �expert�. So let me give an example of two hypothetical investors, Freddie the Flipper and Barbara the Buy & Holder, who both contract to purchase a preconstruction condo in Atlanta. Suppose the condo costs $250,000 and requires 20% down at time the hard contract is signed. Furthermore, suppose the condo will be ready 18 months after signing the hard contract. The broker in charge feels very strongly about this project and is honestly convinced they will be worth $350,000 at time of closing. Now this is Freddie�s first deal and he has heard you can make TONS of money flipping preconstruction projects. Freddie does not have much money and takes out an equity line of cre-dit for the down payment. Freddie has no intentions of closing this property but wants to flip so he does not have to pay closing costs. All he can think about is that this very knowledgeable, and quite trustworthy broker thinks he will make $100,000 in 18 months. He can hardly control his excitement. Now Barbara the Buy & Holder is an old seasoned pro. She has done 10 preconstruction projects in the past, has multiple long term rental properties, and does a flew flips of single family houses on the side. When she enters the contract to purchase this property, Barbara thinks the values will keep going up but she KNOWS that she can get close to covering her monthly expenses if she has to rent it out. She firmly believes in the area and believes this is a low risk investment. She listens to the OPINIONS of the broker, agrees with him, but knows that nothing is certain. Looking into our crystal ball, suppose we find out that at time of closing, the condo�s have actually dropped in price and only have a fair market value of $210,000. There has been a temporary softening of the local economy and some people have been dumping their properties in a panic. All expectations are that this is a temporary blip but we know that NOBODY can predict the future. Freddie gets the call that he has been dreading. It is now time to close on the condo and will require about $10,000 in closing costs. He does not have it! After consultation with his attorney, he realizes that there are two options: close the property or walk away from his $50,000 down payment. Since he financed that down payment in a home equity line and it does not �feel� like he really lost the money (even though is monthly payments have gone up), he decides to walk away. This finally releases him from months of mental anguish over this foolish mistake he has made. Barbara on the other hand realizes that this is part of the game. She is still very bullish on this project and simply closes and rents the condo and is losing about $50 per month net all expense. No big deal for her. Furthermore, she buys another condo from a really desperate seller who closes on it, then does not know how to rent it, panics, and sells for $200,000. Two years later, Barbara sells these condos into a booming economy for $350,000 netting $100,000 from one and $150,000 from the other. Yawn: just another day at the office for a well prepared real estate investor. I hope that this article has provided an example of how the outcome of an investment is MORE about the approach and thought processes of the investor rather than the investment itself. I learned this in the area of trading from one of my mentors, Van Tharp, but it is equally applicable in all types of investments. Chris Anderson is a leading authority on preconstruction real estate investing. Get his 4 day e-mail course and a 33 minute video free today! Visit www.GetPreconstructionProfit.com & www.GetPreconstructionDeals.com.
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Recommended
Listening:
Seven Tips to Be a Peak Performance Investor/Trader Audio CD
For only $49.95, this CD covers the seven foundations necessary for peak performance trading and investing. This material in this CD will become the cornerstone of your trading and investing education. |
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Excerpts from Dr. Tharp's Mastermind Discussion Forum
Examples of Trading Goals
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Van Tharp's Most Recent Market Update including the 1-2-3 Model and the Five Star Model. Look for a new update at the beginning of each new month. |
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Quote of the Week "A bank is a place that will lend you money if you can prove that you don't need it." ~Bob Hope |
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