Investing with World Class Money Managers (Trend Following Mentor)

World Class Trading Program … Money Manager Blow Ups …… Common Investor Mistakes ……… Chapter Buying the Drawdown ……………………. Transparency and Liquidity …… Buying the Drawdowns of Commodity Trading Advisors ………………. Kindle Edition , pages. Published February 26th by Trend Following Mentor. To see what your friends thought of this book, please sign up. Lists with This Book. This book is not yet featured on Listopia.

Aaron rated it liked it Jan 20, However, often the suffering is a result of ill-informed decisions. This guidance can be based on broader market views such as reducing exposure when the market is overvalued, or based on goal duration—all advisors tell investors to reduce equity exposure well before the goal date. Maintenance of a readily available emergency fund mostly in debt instruments will also reduce the need to withdraw from equities during bear markets. Volatility scares Returns from equity are drastically different for different time period.

Abhishek Jain, 35, an IT Professional, completely avoids investing in stocks. What is the guarantee that these funds or their fund managers will be there in the long term? This is a tradition. Though equity mutual funds give out historical returns, they also point out the risk of equity investing: Savings mode for long-term goals: Why he avoids equities: Introducing entirely risk-averse investors to debt funds, say experts, can be a good start. Then investors can slowly get into other debt products.

Financial illiteracy Despite the efforts by the industry, regulators, and the financial media, financial literacy is still very low—even among well educated professionals in the financial services sector. His entire savings are in bank deposits and other debt products.

There is even a set of investors that views stock exchanges as gambling dens at worst and centres of speculation at best. Financial illiteracy and lack of awareness about the real returns—adjusted for inflation and tax—is a key reason why investors continue to put their money in bank FDs. The impact of negative real returns will be particularly pronounced for long-term goals such as retirement planning. Lack of time and expertise Time crunch also plays a role in keeping investors away from the stock market.

Instead, he has started putting money in debt products and other low-yield instruments such as life insurance policies four and pension plans one. Since he has 15 years left for his retirement, re-focusing his portfolio through equity funds could be much more rewarding for him. Instead of opting for the expensive route of personal portfolio managers, just like Kishore, Maru too has the option of investing in equity mutual funds.

Sagar Maru, 30 years, Banking Professional Annual income: This may be just a hyper vigilance on my part as to the length of time I have been doing it, so that is something to take into consideration I suppose. I was just wondering why do you think the success rate among Fx traders is so low? Mainly, it takes longer than anyone expects. Which is why you have to do it because you want to, not for money. I was absolutely giddy to get up and trade.

I would have eaten Mr. I just wanted to do it. That is probably one reason why I do well at it. The practice is the same thing. I am honing my skill all day everyday, but it never feels like it because I just want to do it. There is no destination. There is no letting up or letting your guard down, because as soon as that happens another trader will come along and take your money. They think that if they put in a bit of time it will become easy. It is always work, and the market will also try to fool you or cause you to question yourself. That is what I love about…it always keeps you on your toes.

People either love that aspect and embrace it, or they go broke. But you can still never let your guard down…even after doing this for about 14 years. Every single trade, and more importantly the time between trades spent staring at charts, is an exercise in discipline to follow a method and not deviate which my mind still wants to do all the time, but I control it. And that brings up another point, which was not in my response above.

People have an action bias. They want to trade, and so they look for trading opportunities. But successful trading is as much about NOT trading as it is about trading. That means actually activity for only 20 seconds out of THAT is the hard part, controlling yourself to execute only at the VERY few seconds of the trading day where there is a decided edge based on your strategies. For the other seconds I am left to plan my next move and analyze the market so I am ready to pounce when my next 1-second of physical trading action occurs.

I use the time between trades to strategize upcoming trades, rehearse them in my head, run through various scenarios that could develop once I am in the trade and how I will handle them. Not many people do that, which could be another contributor to the low success rate. Just like in chess, the victory goes to the person who uses the moments in between moves to strategize further ahead. Every day must by default be a fight of mental control. Its like central banks sucking out liquidity from the markets.

The people who run casinos stock market are forming indirectly government. Money is just their consent. Whatever they sign now digitally becomes money. This is a different perspective. Forex trading to me needs someone who is emotionally balanced, resilient towards risk you must be able to deal with losses at times and keep a clear head even in your winners, dedicate yourself towards educating and improving your edge in trading.

In conclusion trading is not really for everyone, but if you can stay committed, get a mentor, keep yourself motivated, read self-development books and believe in yourself and you can surely make it in the FX market. Focus on making yourself a skilled trader, paper trade, dont underestimate demo trading, practice until you see that you can now consistently make profits month-to-month. Once you have the skill, money will naturally flow in your trading account — and personal bank account! Unfortunately the statement here is non-specific and gives no strategy on how to do anything.

The only take away I get is avoid the herd mentality by: Trevor — would you be willing to email with me a little? I am a fledgling ForEx trader who is quickly dying on the proverbial vine and I need some help and assistance. Cory well said and written about why most traders lose money. I am not a trader yet but really fascinated and challenged that there is money to be made in trading. The object of trading is to make money right? But why with all these gurus and technological presentations etc still I believe missing the point except of what I read from you.

You hit the right button.

I am 68 years retired and made most of my money following a simple rule other than my 3 pensions. Show me strategy when to buy wholesale and sell retail in trading with everything factored in, I can make a living or earn an extra income for life. I am just a simple and uncomplicated minded person. Sure will enjoyed more if I had known trading 20 years ago. Happy new year and a Happy profitable trading to all. Cory, I stumbled onto this page while looking for a figure as to what percent of the investing population trades Futures, for a book I am writing.

No luck finding that number, but I do sometimes like reading articles that people post about making money trading. Usually I find humor in the comments of false prophets suggesting they can show you how to make money. I started reading your article and have to say kudos to you for speaking honestly. Friends ask me regularly how to make money, and I always inform them not even to try. Just invest, watch your tax efficiency, as expenses and gains are one and the same, and over time hope for the best.

One thing I do disagree with though is your comment on statistical aberrations. It is incorrect as a function of the time interval you are using being 1 year intervals. An active professional trader can be reviewed each year on performance of intervals, average and standard deviation. Over my career that gives me several thousand data points. Two other comments I might make for anyone that still wants to play this game, a game I no longer play myself. You are now creating an unequal distribution of scale between your winners and losers, and you are dead before you start, time will finish you quickly.

This takes a serious emotional control, one almost requiring a sociopaths personality. The final outcome is not going to be good. The more sophisticated the product — think options — the worse your disadvantage gets. No one reading this should ever trade options. Options are both far easier and far more difficult to trade. When structured correctly, a profitable trade can be had while being wrong on direction, timing, and volatility direction, the three main components of option pricing.

I do it successfully as a retail trader. It can be done. Matt, With all the generosity of my heart, I wish you the best. I will stand by what I said and inform you it is coming from someone who started their career at a boutique derivative firm and went on to hold title as head of trading at three of the largest trading firms in the world.

My core competency is non-linear derivatives and synthetic structuring, and I pretty much liked to trade in 1, lot clips, but thought nothing of taking down 10 to 50 thousand at a time, and have carried into expiration strike risk of over , on several occasions, which is rather insane, even by my standards.

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I also never had a losing month in my career as arbitrage removed the variability that I am sure you see attempting to trade options directionally. I do wish you well though. Which is more risky…. Owning stock or doing a covered call? The answer is owning stock. Does owning stock give you a chance to make money if the stock goes no where? Does owning stock let you define how much money you could lose without stop orders? Does owning stock in any way let you know how much profit to expect? Does owning stock let you profit when you are wrong directionally?

Hey again Cory, I just re read this article and it really does ring true with me. I am trying to understand why everyone here in the U. The excuse is that all the polls and press had it in the can for Hillary. It just reinforces that the markets ARE an extension of people as a mass. This insight may help me to understand how the market is more likely to behave, do you use that model or do you track back from mainstream thinking to market behaviour, which way round do you assess?

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This is tough question, because it changes. Much of the time it is good to follow the herd to a certain extent. I am a trend trader mostly, so when things are going up I am a buyer only on pullbacks though. But there does come a point when that sentiment becomes too strong. If a trend has been going up and up and up, eventually everyone starts to take it for granted. By that point nearly everyone who wants to buy, has. With no buyers left, the price starts moving down.

Or we also see sentiment extremes on the downside. As oil was falling earlier this year and last it was profitable to bet on the decline. But once you start reading the mainstream media talking about the disappearance of oil, and nearly everyone you talk to saying oil is finished, that is typically when I start buying I also started buying because we were near lows in oil…another bad time in history but oil rallied aggressively off those lows. So I look at sentiment a little bit, but typically you can just see it by looking at long-term charts for investments. You see long-term areas where the price has topped out sentiment too bullish or bottomed out sentiment too bearish.

Sometimes adjustments need to be made for inflation, company growth, etc. Shorter-term trading is really the same thing, but typically that I am not looking or thinking about sentiment at all. I am just trading trends and taking trades based on favorable reward: So mostly I rely on my charts, but for investment purposes when I start to hear a lot of extremely biased proclamations on the market, I usually start trading in the opposite direction of such claims.

Also a great new post today from you, I wish I was already set up for daytrading to take advantage of your insights! Hi Cory, Nice article.

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Unfortunately, we have mostly squandered that potential good on primarily creating products and services which decrease productivity instead of increased it; products which provide us an escape from the real world as opposed to help us harness the real world. The whole article has really got me thinking. I have been seriously following investment blogs and websites for a few years now as I find it an intriguing subject matter which straddles many other subjects including behavioural and group psychology and social anthropology which was actually my subject at university.

There are some incredibly bright and interesting people talking and writing about this field and I love to follow these intelligent guys, I wish I could meet them too and listen! I also enjoy podcasts, which I would love to hear, if you have one. But, strangely, I am not actually invested in the market as yet. I may be a late straggler and lose everything! Having said that, naturally I would consider investing and I have a number of fantasy accounts to play with strategies.

I have friends who day trade but I would not previously have considered that as a viable way to earn income.

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But on reading this article, I am thinking day trading would be a very rapid way to learn the reality of trading and the stock market. Would day trading be a kind of microcosmic method of learning about how markets work and how to best read them and work in them for a profit? Thanks for the feedback. Yes, day trading is like the microcosm of investing. It will show how prices move.

Typically patterns that play when day trading also play out over longer time frames as well. While my investing strategies are different than my day trading method, they are based on similar concepts. If the ultimate goal is to just invest, then learning to day trade—which takes considerable time and effort—seems kind of pointless. Better off just to focus on learning how to invest.

But if day trading is the goal, then by all means focus on that. Whether day trade, swing trading or investing a person only needs to learn one strategy that works for them in order to make money. Thnx kudos to u,for detailed explanations,its v. People can do this. But ultimately they still need to follow what the successful trader is doing. This is quite hard. It is no different than just following a winning strategy following a strategy or a person are the same thing. If you follow what a winning trader does, exactly, you should be profitable.

Yet few who take this approach are…see video at end of article. Now the even greater irony. Even without reading the comments above I would imagine the overwhelming majority of such commenters will indicate they totally understand what makes a trader successful. Cory— Thank you very much for your insightful analysis! The more I use behavioral analysis in my investing, the more successful it becomes. To get to that point, you have to have inherent, God given traits of perception, patience, intellectual capacity and nerve and years of experience.

This is a great article. Sell sell sell buy miners. Hi everyone, I keep studying and learning and trying different strategy but none really seems to work I have done courses read books and still I can t find anything that really give me an hedge, so I start wondering do they really exist? That is a respectable day trading return in your first year. Many people lose all their capital in the first year of day trading. You are likely doing some things right, it is just a matter of continuing to fine tune your approach. Look through your trades, and spot areas you could improve.

For example, is there a way to make your losses slightly smaller? Does the price tend to run a bit further after you get out? If it does you could seeks to expand your profits slightly. Very minor changes over many trades can take you from being a losing trader to a consistently profitable…but it takes constant monitoring and adjusting to current market conditions. There are times where there seems to be a disconnect though…. But markets more accurately: Indeed market is irrational. Oil went up yesterday when it seem that oversupply is still rampant in the market.

Lost money by betting against it! That is part of trading. But believing oil will fall because of oversupply on a particular day is not a prudent strategy.

Oil has been rising for weeks in spite of oversupply. Successful traders trade off things they have tested and that have proven to reliable over and over again. That information was already priced in. Almost everybody was on-board with that idea, and that is why oil fell so much. Oil prices had to go up in the Canadian Investing Newsletter I have been buying commodity stocks since January.

Markets move ahead of the news. They started dropping as oversupply became a potential problem, and then fell heavily when it started getting some publicity.

Investing with World Class Money Managers (Trend Following Mentor)

But markets are forward thinking…so the price rises in anticipation of supply eventually dwindling because some oil companies will go bankrupt and as oil producing countries get squeezed financially there is an increased chance of conflict which would further increase oil prices. The drop was priced in, everyone was onboard, which means there was no one left to keep pushing the price lower….

As it pushes up, everyone who sold at the bottom is forced to buy and get out of their losing positions, pushing the price up further. Ultimately though, none of this matters. Study the charts and find patterns that work over and over again. Trade the pattern when it occurs, and you will find greater success in the markets.

Hi mitchell, I have created a simulation chart based on random numbers, resultant chart look very similar to our real market charts, there will be trends small, major and all kind of, now seeing that trends also form in randomized charts and today most trading happen by algo hft machines, which are not following trends in most cases rather selling buy to capture the spread, so it confuses me whether the trend formation happen due to conviction of many tradors or some other reason behind it. Great point and question Abhi.

I think your question relates to the fact that something appearing similar is different than cause and effect. If you go into a casino, you can track whether the roulette ball falls on black or red, or if baccarat hands come up player or banker. If you chart this, you will see trending periods, as well as choppy periods.