This 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 not for the Get-Rich-Quick-ers. It is for those who are interested in Position Trading, the crossover between Day Trading and Long-term Speculations or Investing.

Trading is a business. You cannot hope to survive year after year in the financial markets if you treat it with an otherwise respect. You need to spend total time and commitment for your business to be 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. Because, know that all judgements and decisions are made by you, yourself. Those engaging in this business should determine to learn and understand it to the best of their ability with informative data available. The critical success 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 aspects of trading as a business. Where consistent 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 of business just like the operating goods and raw materials of a conventional brick and mortar business.

As long as your market positions are 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.

Remember that Profits always take care of themselves, but Losses never do. Capital protection should always be kept in mind. Without the capital to do your business, you would have no business, no income. Protect yourself, cut your losses short before the loss assumes larger proportions. We are pursuing a consistent and growing base of capital and profits, not one-time windfall killings which often than not is a reflection of the gambler’s fallacy within. You are your own insurance policy. The only way you can continue 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.

It is the traits of human to be Hopeful and 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 the two and often found themselves caught in reverse positions. That is to say, you 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 is required of you is Patience. Experience has proved that the real money made in speculating has been in commitments in a stock or commodity showing a profit right from the start. Ignoring this and plunging in your full line of 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 early is the influence of the gambler inside you, Greed, that is. But starting too late, after an opportunity has been shown to you clearly 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 strictly, 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. Certain patterns of group behaviour will always continue to repeat again and again. As the saying goes, “Market can change, but human nature has stayed the same for centuries”. That is precisely the reason why we are able to consistently make money month after month.

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

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

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