Let’s face it, you are investing by allocating money in expectation of some returns in the future.
You want to grow your account. you want to put your money to work for you so that you don’t have to take a second job.
Trading and Investing is complex, but how do you even begin to accomplish such big feats?
Our proposal to you is to start SMALL.
1.) Start Small
Here’s the thing, it can feel tremendously overwhelming when you invest your first dollar in the markets. It can feel like a daunting experience where the rest of the world, even your friends seems like they have got it figured out.
Paul Tudor Jones II , hedge fund manager of Tudor Investment Corporation, estimated to have a net worth of $4.3 billion by Forbes.
John William Henry II, owner of Boston Red Sox and Liverpool Football Club, estimated net worth at $2.3 billion.
Henry was a college dropout and he played guitar in a rock band in the 1970s.
Henry stated trading corn and soybean futures ‘using his own money’. When he found his mechanical approach to trading works consistently, he opened a small office in Irvine, California.
Henry believed that humans, by nature are trend followers, reacting mechanically to events, much as the clapping of one person in a sports stadium. One clap typically triggers the next and the next until it becomes widespread applause.
Markets act just like people, markets is crowd psychology. Highly successful traders like Henry , Dennis and Jones understand this and have an eerie ability to take advantage of profitable opportunities.
He tested his trend-reversal method- which always held a position , either long or short in various markets and began marketing his management to be the largest commodity brokerage firms in the U.S.
Think about Richard Dennis, aka. ‘Prince of the Pit. Borrowed $1,600 and reportedly made about $200 million in about ten years.
Dennis started out as a runner on Chicago Mercantile Exchange at the age of 17. When he first started trading commodities, he borrowed $1,600 from his family and by 1973, he grew that into over $100,000. Dennis became a millionaire by 26 year old.
Dennis strongly believed successful trading can be taught. He formed a group traders, gave them the trading system and then fund them ranging from $250,000 to $2 million of his own money to manage.
in 5 years his so called ‘Turtles’ made a profit of $175 million.
2.) KNOWLEDGE IS NOT EVERYTHING, EXECUTION IS
The New Investment Superstars, Lois Peltz learned that highly successful money managers like Henry
have a philosophy that sums up like this:
“If one theme summarizes Henrys philosophy, it is the knowledge that one cannot predict anything. Henry is a long-term follower. His philosophy is based on the premise that market prices, rather than market fundamentals, are the key aggregation of information needed to make investment decisions. He says, The markets are peoples expectations, and these expectations manifest themselves as price trends. We live in an uncertain world. One cannot predict the future of anything. In an uncertain world, identifying and following trends may be the only reasonable investment approach over the long term. Henry feels that a mechanical approach has more value since no scientific approach or solid testing can be applied to discretionary trading. Henry says that when he first researched the markets in the 1970s, he was looking for a methodology that would work through many market conditions. His research showed that long-term approaches work best over decades. There is an overwhelming desire to act in the face of adverse market moves. Usually it is termed avoiding volatility with the assumption that volatility is bad. However, I found avoiding volatility really inhibits the ability to stay with the long-term trend. The desire to have close stops to preserve open trade equity has tremendous costs over decades. Long-term systems do not avoid volatility, they patiently sit through it. This reduces the occurrence of being forced out of a position that is in the middle of a long-term major move.”
3.) Small allows you to create MOMENTUM
Momentum is your friend. Investors make money when a market has momentum.
For instance, we are on a mission to help traders all over the world. That’s the big idea.
For years, we have been helping thousands of people with this. Instead of trying to help ALL trades, i first started helping this smaller market I know I can dominate and really serve. This creates a lot of momentum and opportunities down the road.
4.) Instead of trying every strategies right out of the gates, it is better that you BREAK IT DOWN
What are the strategies that you can focus on and dominate right now?
The Key is PATIENCE !
if we are patient in the beginning, the momentum is actually going to reward us financially if our trading plan works.
Trading an instruments like options can be challenging. There are many components to study like Beta, Gamma, Delta , etc… When we try to place our very first trade like an outright call or put, vertical spread or Iron Condor, it’s slow. It’s heavy, like pushing a giant ball up a hill.
We might get frustrated , we might give up , we don’t do anything , thats where your learning curve stagnates.
When we stand still, it feels like the rest of the world is passing us by .
5.) MOMENTUM = OPPORTUNITY
Think back Richard Dennis, think back John Henry, Those are good examples of people starting small and then leveraging on their momentum to creates new opportunities.
The Live Tradr team is a group of hedge fund professionals trading their own funds delivering the latest high probability trading signals to you.