Five Fatal Flaws of Trading
Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit — and more importantly, do it consistently. How do they do that?
That’s an age-old question. While there is no magic formula, EWI Senior Instructor Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don’t claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person’s life. Maybe you’ll find one in Jeffrey’s take on trading. We sincerely hope so.
The following is an excerpt from Jeffrey Kennedy’s Trader’s Classroom Collection, Volume 4. Learn how to get 14 more actionable trading lessons — FREE — below.
Why Do Traders Lose?
If you’ve been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn’t seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can’t seem to prevent that invisible hand from depleting your trading account funds.
Which brings us to the question: Why do traders lose? Or maybe we should ask, “How do you stop the Hand?” Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account. Read the rest of this entry »
Why Choose the Wave Principle?
Robert Prechter reveals why he embraced the Wave Principle.
Robert Prechter is the widely recognized authority on the Elliott Wave Principle.
Read how he learned about the Wave Principle and why he embraced it in the edited excerpt from his book Prechter’s Perspective below (Q&A format):
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Question: What was it about Elliott that captured your attention?
Robert Prechter: I had seen some mentions of the Wave Principle in a few market newsletters and a couple of obscure books, and I decided that either this was someone’s elaborate fantasy or it was an amazing discovery. I wanted to reject it from what evidence I could find or include it as part of my growing arsenal of technical analytical methods.
Q: How long did it take you to develop your “eye” for discerning these waves? Read the rest of this entry »
“Market Manipulation” Is Not Why Most Traders Lose
How to Identify and Use Support and Resistance Levels
Since 1999, Elliott Wave International senior analyst and trading instructor Jeffrey Kennedy has produced dozens of Trader’s Classroom lessons exclusively for his subscribers. While commodity markets are known as some of the toughest trading environments around, these actionable lessons from a skilled veteran can help you trade commodities, or any market for that matter, with more confidence.
Enjoy this excerpt from Elliott Wave International’s free Club EWI resource, the 32-page Commodity Trader’s Classroom. Read the rest of this entry »
Learn Elliott Wave Analysis — Free
Understand the basics of the subject matter, break it down to its smallest parts — and you’ve laid a good foundation for proper application of… well, anything, really. That’s what we had in mind when we put together our free 10-lesson online Basic Elliott Wave Tutorial, based largely on Robert Prechter’s classic “Elliott Wave Principle — Key to Market Behavior.” Here’s an excerpt:
Successful market timing depends upon learning the patterns of crowd behavior. By anticipating the crowd, you can avoid becoming a part of it. …the Wave Principle is not primarily a forecasting tool; it is a detailed description of how markets behave. In markets, progress ultimately takes the form of five waves of a specific structure.
The personality of each wave in the Elliott sequence is an integral part of the reflection of the mass psychology it embodies. The progression of mass emotions from pessimism to optimism and back again tends to follow a similar path each time around, producing similar circumstances at corresponding points in the wave structure.
These properties not only forewarn the analyst about what to expect in the next sequence but at times can help determine one’s present location in the progression of waves, when for other reasons the count is unclear or open to differing interpretations.
As waves are in the process of unfolding, there are times when several different wave counts are perfectly admissible under all known Elliott rules. It is at these junctures that knowledge of wave personality can be invaluable. If the analyst recognizes the character of a single wave, he can often correctly interpret the complexities of the larger pattern. Read the rest of this entry »
Happy 160th Birthday, Charles Dow
How Do You Get from Dow Theory to Elliott Wave Analysis?
If you are interested in Elliott wave analysis, odds are that you have also heard of Dow Theory, whose best and longest-lived proponent is Richard Russell. (Best wishes to Richard as he recovers his health.) This excerpt from Prechter’s Perspective explains how Elliott wave analysis and Dow Theory are connected. We wanted to run it now in honor of the 160th anniversary of the birth of Charles Dow, which the Market Technicians Association celebrates on Wall Street on Thursday, November 3, 2011. Read the rest of this entry »
How You Can Make Yourself a Better Trader
Define Yourself: What Kind of Trader Are You?
The idea of being a successful trader is exciting. The reality of becoming one is another thing. You need to understand more than the markets — you need to understand yourself.
EWI’s Senior Analyst Jeffrey Kennedy knows what it takes. He has analyzed and traded the markets for over 15 years. Jeffrey has learned what it takes to be successful, and he has the discipline to apply that knowledge. Enjoy this excerpt from his free Club EWI eBook Best of Traders Classroom, in which he answers: What kind of trader am I? Read the rest of this entry »
Socionomics and the Misery Index
Socionomics is an area of study pioneered by Robert Prechter of Elliottwave International. It is the study of social mood and how it affects economics and politics. Traditional thought has it that good economic times cause euphoria and lead to investor optimism. Socionomic theory stands this on its head and says that investor sentiment is cyclical and as investors become more optimistic that causes the markets to rise. Optimistic crowds ignore bad news and focus on good news. Pessimistic crowds focus on bad news to the exclusion of the good news thus generating self- fulfilling prophecies.
One hard measure of the well being of the masses is the “Misery Index” which is calculated by adding the inflation rate to the unemployment rate. As the misery index climbs social unrest climbs. Currently, the misery index is just a hair below 13% and we can see the discontent and anger manifested in things like the “Occupy Wall Street” (OWS) movement. Previously high levels of the misery index resulted in the resignation of Richard Nixon and Jimmy Carter being a one term President.
For a complete look at the political implications of the misery index and the accompanying chart see InflationData’s Misery Index.
Forex Trading Course Online
by Alex Cadens
Taking a Forex trading course online is an essential step in ensuring your trading operation will continue to grow and make you a bit wealthier everyday. As you might already know, forex trading is one of the most profitable investment options available to anyone looking for a decent return. Nowadays there are a few automated forex trading software packages which allow you to carry out your forex trading operation with almost no action on your part, in fact, I personally use two of these systems in my forex trading operation with very satisfactory results.
However, although these automated forex trading software packages are usually over 90% accurate, there will come a day when they place a losing trade -or a trade that looks like one- and this is where fear and panic will come to play a catastrophic role if you have no idea about what is going on before your eyes. Why? Well, because if you do not know how to read the market you will probably rush into close the trade for a loss, instead of waiting patiently for a correction. Taking a forex trading course online will give you the tools you need to make informed decisions when the situation calls for it.
The forex market is very unique, and unlike the stock market, it always has profitable opportunities no matter what the crisis in the world because the currencies are pairs so one is always improving compared to the other, always opening windows for profitable trades.
If you carry out your forex trading operation with automated forex trading software packages, taking a trading course online will certainly increase your profits, and if you trade or intend to trade manually, a forex trading course is simply a must.
Taking a forex trading course online is an essential step in ensuring your trading operation will continue to grow and make you a bit wealthier everyday.
About the Author
In my website there is a comprehensive evaluation of two forex softwares and one trading course which I personally consider the best around: http://www.specialonlinebusinessreviewauthority.com