How I Trade For A Living - Chapter 1

 

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How I Trade For A Living ...And Now So Can You

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DISCLAIMER AND TERMS OF USE OF AGREEMENT

The author and publisher of this eBook and the accompanying materials have used their best efforts in preparing this eBook. The author and publisher make no representation or warranties with respect to th thee accuracy, applicability, fitness, or completeness of the contents of this eBook. The information contained in this eBook is strictly for educational purposes. Therefore, if you wish to apply ideas contained in this eBook, you are taking full responsibility for your actions.

EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT THIS T HIS PRODUCT AND IT’S POTENTIAL. EVEN THOUGH THIS INDUSTRY IS ONE OF THE FEW WHERE WHERE ONE CAN WRITE WRITE THEIR OWN CHECK IN TERMS OF EARNINGS, THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TRADING TECHNIQUES AND IDEAS IN THESE MATERIALS. EXAMPLES IN THESE MATERIALS MAT ERIALS ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS. EARNING PPOTENTIAL IS ENTIRELY DEPENDENT ON THE PERSON USING OUT PRODUCT, IDEAS AND TRADING TECHNIQUES. TECHNIQUES. WE DO NOT PURPORT THIS AS A “GET RICH SCHEME.”

ANY CLAIMS MADE OF ACTUAL EARNINGS OR EXAMPLES OF ACTUAL RESULTS CAN BE VERIFIED UPON REQUEST. YOUR LEVEL OF SUCCESS SUCCESS IN ATTAINING THE RESULT CLAIMED CLAIMED IN OUR MATERIALS DEPENDS ON THE TIME YOU DEVOTE TO THE PROGRAM, IDEAS AND TRADING TECHNIQUES MENTIONED, YOUR FINANCES, KNOWLEDGE AND VARIOUS SKILLS. SINCE THESE FACTORS DIFFER ACCORDING TO INDIVIDUALS, WE CANNOT GUARANTEE YOUR SUCCESS OR INCOME LEVEL TRADING THIS SYSTEM, NOR ARE WE RESPONSIBLE FOR ANY OF YOUR ACTIONS.

The author and publisher do not warrant the performance, effectiveness or applicability of any sites and materials listed or linked to this eBook.

All links are for information purposes only and are not warranted for content, accuracy or any other implied or explicit purpose.

This eBook is © copyrighted by HowToTradeForALiving.com. No part of this may be copied, or changed in any format, sold, or used in any way other than what is outlined within this eBook and our site affiliate  programs under any circumstances.

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How I Trade For A Living ...And Now So Can You

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HOW I TRADE FOR A LIVING ...AND NOW SO CAN YOU TRADER’S SECRETS REVEALED !  The Challenge – Trading as a Business  __________________________________________ 5  What you need __________ _____________________ ______________________ ______________________ ______________________ __________________ _______ 8   The Trading Plan________ Plan___________________ ______________________ ______________________ ______________________ __________________ _______ 10   Goals ______________________________ _______________________________________________________________ __________________________________________ _________ 10  The Plan _____________________________________________________________________ _____________________________________________________________________ 10  Affirmation Affirmatio n & Visualisation __________________________________ ______________________________________________________ ____________________ 11 

The Trading System __________ _____________________ ______________________ ______________________ ______________________ _____________ __ 13  The Natural Behavioural Behavioural Cycle System (NBC System) System) _____________________________ _________________________________ ____ 14  Overview of System ___________________________________________________________________ 14 

Cycle Phases:_______________________________________________________________________ 16  Dynamicss of Phase Dynamic Phasess ___________________________ _____ ____________________________________________ ______________________________________ ________________ 17  Self-reinforcing forces _____________________________________________________________ 17  Self-defeating forces ______________________________________________________________ 18  SETUP _______________________________________________________________________________ 20  Technical Chart Configurations _______ ________________ _________________ ________________ _________________ _________________ _______________ _______ 20 

Chart Style: ________________________________________________________________________ 20  Technical Indicators: _________________________________________________________________ 21  ___________ ____________________________________________ ____________________________________________ _______________________ _ 24  ENTRY  _________________________________ Long or Buy Entry: _____________________ ___________________________________________ ____________________________________________ _______________________ _ 24  Short Sell Entry Entry:: ___________________ _________________________________________ ____________________________________________ ___________________________ _____ 24  Market Re-Entry and Pyramiding Positions: ________ _________________ _________________ ________________ _________________ _____________ ____ 24  ____________________ ____________________________________________ ______________________________________ ________________ 25  EXIT  __________________________________________ Cycle Exhaustion or Normal Exit ________ ________________ ________________ _________________ _________________ ________________ ______________ ______ 25  Long Strat Strategy egy Exit ___________________ _________________________________________ ____________________________________________ _______________________ _ 25  Short Strategy Exit ________________________________________________________________ 25  Initial Stop Loss _____________________________________________________________________ 25  Stops for Long positions _____________________ ___________________________________________ ______________________________________ ________________ 25  Stops for Short positions ___________________________________________________________ 25  Profit or Trailing Stop ________________________________________________________________ 26  Stops for Long positions _____________________ ___________________________________________ ______________________________________ ________________ 26  Stops for Short positions ___________________________________________________________ 26  Other Exit condit conditions ions __________________________________ ____________ ____________________________________________ ______________________________ ________ 26 

Risk and Money Management___________ ______________________ ______________________ ______________________ _______________ ____ 28   Probe & Pyramid Strategy _______________________________________________________________ 29  How to enter - Steps ___________________________________________________________________ 29   Money in your hand ______________________ ____________________________________________ ____________________________________________ _______________________ _ 30 

Position Sizing____________________________ _______________________________________ ______________________ ______________________ ___________31  Total Equity Model ___________________ _________________________________________ ____________________________________________ ___________________________ _____ 31  Position Sizing – Percent P ercent Volatility Volat ility Model ________ _________________ _________________ ________________ ________________ _________________ _________ 31  Risk versus Reward ____________________________________________________________________ 33  

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How I Trade For A Living ...And Now So Can You

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Rules of Trading - Your Guide ___________ ______________________ ______________________ ______________________ _______________ ____ 35  Rule No. 1____________________________________________________________________________ 35  Rule No. 2____________________________________________________________________________ 35  Rule No. 3____________________________________________________________________________ 36  Rule No. 4____________________________________________________________________________ 36 

The Don'ts ___________ ______________________ ______________________ ______________________ ______________________ ____________________ _________37   Price Behaviours ___________ ______________________ ______________________ ______________________ ______________________ _______________ ____40   Putting It Together - The Daily Routine __________ _____________________ ______________________ ____________________ _________42  Day 1 – Preparation. Preparat ion. After Market Ma rket Hours. ________ _________________ _________________ ________________ ________________ _________________ _________ 42  Procedures for selecting potential trading candidates: __________________ __________________________ _________________ _________ 42  Day 2 - Entry days _______________________________ __________ ___________________________________________ ______________________________________ ________________ 43  Procedures for market entry/re-entry: _________________ __________________________ _________________ ________________ ______________ ______ 43  Day 2 to Day N – Holding Days ___________________________________________________________ 43  Procedures for monitoring of existing positions: po sitions: ___________________ ___________________________ _________________ _____________ ____ 44  Day N - Exit days _____________________ ___________________________________________ ____________________________________________ ___________________________ _____ 44  Procedures for exiting positions _________ _________________ ________________ _________________ _________________ ________________ ___________ ___ 44 

A Step-by-Step Example: ________________________________________________________ ________________________________________________________ 45  Long Position Position Example Example _________________________________ _____________________________________________________ ____________________ 45  Short Position Example ____________________________________________ _____________________________________________________ _________ 50 

Conclusion ___________ ______________________ ______________________ ______________________ ______________________ ____________________ _________55   APPENDIX I: The Emptiness Emptiness  __________________________________________________ 57    APPENDIX II: Know Your System System Software Report Report _______________________ ________________________________ _________59 

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How I Trade For A Living ...And Now So Can You

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The Challenge – Trading as a Business

“The game of speculation is the most most uniformly fascinating fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, nor for the get-rich-quick adventurer.”

~ Jesse Livermore, The World’s Greatest Stock Operator

This eBook is written for those who are serious about trading as a main source of income. It

is not for Investors, not for Gamblers and certainly certainly not for the Get-Rich-Quick-ers. Get-Rich-Quick-ers. It is for those who are interested in Position Trading, the crossover between Day Trading and Longterm Speculations or Investing.

Trading is a business. You cannot hope to survive survive year after year in the financial financial markets if you treat it with an otherwise otherwise respect. You need to spend total time time and commitment for your business to to be successful, successful, just like any other conventional businesses. The only difference is that you and you alone are responsible for the ultimate success or failure of your business in all situations. situations. Because, know that all judgements and decisions are made by you, yourself. Those engaging in this business should should determine to learn and understa understand nd it to the best of their ability with informative informative data available. The critical success factor factor of the magnitude of your success will be directly proportional to the honesty and sincerity of discovering your own psychology and emotional controls, doing your own thinking and reaching your own conclusions.

Profits and Losses are are aspects of trading trading as a business. Where consistent Profits Profits tells you that you are doing things right, Losses, on the other hand, shows that you have made wrong business decisions. Losses are in fact, the Cost Cost of business just like the the operating goods and raw materials of a conventional brick and mortar business.

As long as your market positions are right, right, let it ride and ride along with it. It may grow into a very large profit, and as long as the action of the market does not give you any cause to worry, have the courage of your conviction and stay with it.

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How I Trade For A Living ...And Now So Can You

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Remember that Profits always always take care of themselves, themselves, but Losses never do.

Capital

protection should always always be kept in mind. Without the capital capital to do your business, business, you would have no business, no income. income. Protect yourself, cut your losses short before the the loss assumes larger proportions. We are pursuing a consistent a and nd growing base of capital an and d profits, not one-time windfall killings which often than not is a reflection of the gambler’s fallacy within. You are are your own insurance insurance policy. policy. The only way you you can continue in in business is to guard your capital account and never permit yourself to lose enough to  jeopardize your operations at some future date when your market judgement is correct. correct.

It is the traits of human to be Hopeful and equally equally so to be Fearful. The successful trader should always be hopeful when their trading positions are moving in their favour, i.e. profits increasing and just as fearful when their trading positions went against them, i.e. losses accumulating. However, the average investor confuses confuses the two and o often ften found themselves caught in reverse positions. That is to say, you should should be feeling greedy winning, at times when you are fearful and doubly fearful of losses when you start to be hopeful!

Another quality that that is required of you is Patience. Experience has proved proved that the real money made in speculating has been in commitments in a stock or commodity showing a profit right from the start. start. Ignoring this and plunging plunging in your full line of positions positions or capital will result in heavy losses and stop short your career as a Trader. Have the patience to wait for the sure thing, the perfect time to begin your operations when the Trading System shows you. Beginning your operations too too early is the influence of the gambler inside you, Greed, that is. But starting starting too late, after an opportunity opportunity has been shown to you cclearly learly is  just as equally Ignorant of you. You do not need to be in the market all the time, everyday. You are not Day Traders. Follow the Trading System strict strictly, ly, your Guide; and your livelihood will be taken care of itself in the long run.

My theories and practical applications have proven to my satisfaction that nothing new ever occurs in the business of trading, psychologically speaking. speaking.

Certain patterns patterns of group group

behaviour will always continue to to repeat again and again. As the saying goes, “Market “Market can change, but human nature nature has stayed the same ffor or centuries”. That is precisely the reason reason why we are able to consistently make money month after month.

The business of speculations speculations is nothing nothing more than anticipating anticipating coming events. One must form an opinion as to what the next move of importance will be in a given stock and

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How I Trade For A Living ...And Now So Can You

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attempt to profit from it. it. It is a game of probability, probability, not an academic thesis of right or wrong answers. Markets are never wrong, opinions often are.

This Trading System can be applied to the Stock, Futures and Commodities Markets. However, for the sake of the ease of explanation in the pages that follows, I will stick to illustrate it using the Securities or Stock Markets only in this eBook. Let us proceed then.

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