Trading for Profit: The Genius Habits of 3 Successful Trading Pros That You Can Start Applying Tomorrow

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Trading for Profit: The Genius Habits of 3 Successful Trading Pros That You Can Start Applying Tomorrow Introduction In our latest report, Trading for Profit: The Genius Habits of 3 Successful Trading
Trading for Profit: The Genius Habits of 3 Successful Trading Pros That You Can Start Applying Tomorrow Introduction In our latest report, Trading for Profit: The Genius Habits of 3 Successful Trading Pros That You Can Start Applying Tomorrow, we ve gathered together three very successful traders (Adam Mesh, Michael Ryske, and Chuck Hughes) and have persuaded them to divulge the stories behind their achievements. This report has been titled Trading for Profit, as it contains expert knowledge from three vastly intelligent traders that have found wealth and success in various financial markets. Throughout the three interviews, you will discover professional trading information concerning the fast paced Options market, the long-term and short-term aspects of Day-trading and Swing trading stocks, and even the high pressure environment of volatility manipulation. We asked each trader how they got started in their respective markets, what challenges they faced, and how they overcame them to find ultimate success and wealth. We also queried them on what was next on their horizon, and what the most important lessons and challenges they faced along the way were. Their answers will reveal professional trading techniques, the software that s utilized to achieve larger than average gains, and unique ways of overcoming trading roadblocks that traders face every day. Our goal is that you identify trading ideas that you can incorporate in your daily routine to achieve greater success. We are pleased to share this report with you, and we hope you find it to be worth your while. The Trading for Keeps Team Featured Traders Adam Mesh started out as a day trader in the 90 s while electronic trading was first beginning to revolutionize the markets. In 2000, Mesh launched his first trading company with three others, Chimera. In 2003, Mesh was a contestant on the NBC Average Joe television show, giving the public a rare sneak peek into his trading lifestyle. Following the show s finale, Mesh was inundated with appearance requests and questions. In 2006, Mesh left the private sector and started his first stock market newsletter, following up it a few thousand subscribers later with his best-selling The Average Joe s Beginner s Guide To The Stock Market and Executive Stock Market Coaching Program. Mesh s newsletter is now bursting with 300,000+ subscribers and has coached over 3,500 traders. Mesh continues to forward his core belief that Nobody Cares More about Your Money than You Do. Michael Ryske trades mostly in the futures and swing trading stocks markets. He hails from Kalamazoo, Michigan. Michael got started trading in 2002 while pursuing a business degree in college. He began working with NetPicks in 2008, educating traders and training others in the usage of his company s trading systems, such as the Seven Summits Trader (SST). Michael continues to trade and mentor with NetPicks in Kalamazzo to this day. Chuck Hughes, a former U.S. Air Force and Commercial Airline Pilot, used his downtime to learn how to trade stock indexes with systems. He liked system trading such that the developed his own trend following system that has garnered him $5 million in trading plus 7 prestigious International Trading Contest titles. Chuck is also an author credited with numerous books, including The Guaranteed Real Income Program, The Fail Safe Financial Program, Market Volatility Profit Secrets, The Wealth Building Formula, The Global PowerTrend System, The Wealth Creation Alliance Course, Stock Market Magic, The Wealth Building Business Course, Sure- Thing Profit Secrets, Weekly Option Winners and Ultra Safe Money Strategies. Meshing with Reality Adam Mesh Adam Mesh: Okay, so Adam, for the first question, can you please tell me what your background is and how you got started as a trader? I started trading in 1997, as a day trader. At that point it was very competitive and the market actually wasn't good. There were 50 people in my group at the time, and only six made it. At the beginning I struggled, but what I did was I went around to the best traders, I picked their brains, I asked questions. By the year end I'd been given the award for Most Improved Trader. I continued to trade like that, and eventually switched firms and started trading my own money. I then, with three other guys, started a trading firm where we taught other people how to trade our money. At one point, we had over 100 traders trading our money, where we assumed the risk. I was the partner in charge of teaching them how to trade. In 2006, I was away in Hawaii. I was actually on my honeymoon. I kept having to run from the pool, where it was 80 degrees outside, to the air conditioned business center where it was freezing, just to manage my positions. I ended up losing $50,000 because I wasn't sitting in front of the computer. At that point I thought, I want a lifestyle to go with my trading. I don't want to have to sit in front of a computer all day every day, and I don't make money if I do. That's when I made the change to swing trading, and swing trading is where you manage positions for days, weeks, or months. It ended up being a good thing, because at that point, that's when the black boxes and automated programs started coming in. It made day trading almost obsolete, because you couldn't get in and out of positions for two minutes, because the fluctuation with the computers made it too difficult. Swing trading became even better, and that's what I've been doing for the last seven years and teaching. That was the other fallout of making the change from day trading to swing trading. I was allowed to have more free time, which is how the company got started. Adam: Do you trade equities or options, and can you tell me a little bit about what's unique to each market and why you prefer to trade those? Sure. I made my living and earned my reputation as an equities trader. That's where I was featured in Fortune magazine three consecutive years. The first, Nelson Schwartz is a prominent writer, now he's for the New York Times, stood behind me and I made almost $20,000 in 20 minutes, with Nelson standing behind me. That was really good credibility for the stock trading. A year later, they did an article called Can't Keep a Good Trader Down. The market was weak, but our company was still thriving, flourishing. Then a year later, they did another follow-up. When I started a newsletter business-and that's a whole other story I guess we'll get to-my reputation was built into stock. For a while, I refused to teach options. I even used to write articles that said why I preferred stocks versus options, and I would highlight the benefits of stock. Eventually, I did get involved in the option market. I met up with someone who encouraged me to try some specific strategies. Options are new to my game, but I've actually been using that and doing well with it. The person who taught me options, I brought on to run my options program. As a company, we teach both stocks and options. As an individual, I trade both stocks and options. What's unique about stocks is you're in the company, and you can really manage the position. It trades very true. Unlike options, which is always premiums to be paid and discounts, with stocks-and you need more money to trade stocks-when you're trading stocks, you get involved in equity and you look for your trade. It's pretty much cut and dry, which I like. It's simple. With options, there are a lot of different variables. A lot of times you hear about unusual options activity. The allure of options, the reason why people would choose options, I would think, is it's more costeffective. You don't need as much money to trade with. Sometimes you'll see some fluctuations that aren't consistent with the stock. As an example, let's say I was trading First Solar. If First Solar went from $40 to $60, I make $20 per share. It's a 50% gain. If I was trading the options and time hadn't elapsed yet, well, then there's still a premium built in. If I want to sell, I'm not getting that full gain. If I went from $40 to $60, that's 20 points. In options it won't necessarily be that full gain, and then you have to find which options market to pair it with, because there are different time frames. It becomes a little more complicated if you don't know what you're doing. When it comes to options, there is a strategy I found that I enjoy. It's something that you can't do in stocks, which is selling in the money products. I found I can make consistent money in that. The main difference is options, you need less money, but it's a little bit more complicated. Stocks, it's easier but you probably need a little more money to get started trading it. Adam: What style of trader would you consider yourself today? I consider myself to be a swing trader. I manage positions for days, weeks, and months. The best benefit of that it is emotion-free trading. Adam: The next question. This one might be a little bit redundant, but what is distinctive about how you trade, and what makes you successful at it? Okay. What's unique about the way I trade is I keep it simple. I'm a big believer in anything you do in life, whether it's a diet or exercise or trading, that the key to success is consistency. Example, if you go on a diet that's a cleanse, and you don't eat solid food for two weeks, that's great, you're going to lose weight, but there's no way you can continue that for the rest of your life. Eventually, it will become undone. If you're exercising, and you train for a marathon and you run the marathon, but then you don't run for the next three months, you're going to gain weight back. If you're trading and you have this rigid formula for trading that takes hours upon hours, you're going to have some success, but as soon as you don't have the time or you don't stick the formula, it's going to become undone. What's unique about me is I keep it simple enough to be repeatable, and that consistency is what makes my traders and I successful. That's the most important thing, creating a system that you could repeat effortlessly. I think what everyone enjoys is, I make it simple, but it works. Adam: Do global events affect your trading, and if so, how? Global events create opportunities. I don't speculate. I don't say I think the market's going to go up, I don't think the market's going to go down. I look at technical levels. I'm a technical trader. I want to react quickly to what the market is showing me. As a technical analyst, the market gives you information, you take it, you react quickly, and you trade. If something happens globally, that's more of a fundamental event. It won't impact my trading, but it could impact my trading results. Those kinds of fundamental events will create opportunities within the market, and by reacting quickly, I'm going to take advantage of them. What do you do to protect your portfolio? Do you use hedges, or what sort of a strategy do you employ? Adam: When you're managing your own money, you want to be responsible, and you want to put a big chunk of that money aside in something like a mutual fund that's conservative, that you know won't move that much. When it comes to my personal trading account, that's intended to be aggressive. I want that to outperform everything else going on. Now, it's going to be less dollars in my own trading account than my mutual funds, but I believe I can beat it and I have beaten it, not only percentage-wise, but dollar-wise. Meaning you can have $500,000 in a mutual fund, and if you make 7% for the year, that's a $35,000 gain. Mutual funds will pat themselves on the back, they'll be very happy with it. As an individual trader, you can have $50,000 in a trading account, make 90% because you're trading aggressive, and not only will you make a higher percentage, but you'll actually make more dollars with an account that's worth $50,000 than $500,000. Then for me, that's exciting. That's what I've seen happen, that's what I've tried to teach other people to do. When it comes to how do I protect myself, as before, I'm not hedging. The one thing I do, to manage it well, is I trade individual momentum stocks, and I limit the number of positions I trade. I'm always trading between two and three positions at a time. I trade small amounts of positions, focused on them, but I'm not using hedges, because it's meant to be aggressive. Adam: Okay. Let's talk about volatility right now. What do you like about trading volatility, if you do? Volatility creates opportunity. I equate that to the ocean. If you're someone who's never surfed and you see a scary wave, you're going to say I'm not going anywhere near there. If you've learned how to surf and you've surfed your whole life, those are the waves that you wait for. You can't wait to get out there. It's the same thing with trading. If you don't have knowledge, you don't have confidence, you see scary markets, and you want to run away. If you're trained in how to take advantage of these markets, then when you see that volatility, you see opportunity. Are there any factors that are tricky about trading volatility, and how do you use those to specifically profit? Adam: When it comes to volatility, it becomes tricky if you try to interpret the news. When you see that Greece might be banned from the EU, and you're trying to determine how that affects the market. If you're trying to figure that out, you're going to have problems. If you're trying to interpret earnings reports or the latest job numbers, and trying to make sense of them, it's going to get very confusing. But if you react quickly to the market, well then, you're going to create opportunities. The one thing that could really be tricky even in that sense though is the more news there is, the more back and forth there is. Trying to determine what a clear and decisive move is gets a little more complicated with more news. When I think volatility, I think news. Volatility itself creates opportunity, but if you're seeing a heavy back and forth, then it means, instead of trying to be more aggressive, you've really got to tighten up, trade smaller positions. Knowing how to trade within that volatility is what can be tricky. Adam: You kind of touched on it earlier when you were discussing mutual funds, but what sort of money management techniques do you use? When it comes to me as an individual, and I'm not a financial adviser or anything like that, I always tell people this is what I do. I put a lot of my money away in conservative places where I look for it to grow consistently, it's not going to be a big return. I also wouldn't feel comfortable relying on just that to secure my future. Individually, I trade an account with less money where I can be more aggressive. I want to make higher percentages, and not just higher percentages, but have the actual dollar amount in those smaller accounts outweigh the bigger accounts. Adam: Okay. For my next question, how important to your trading and training is psychology? Can you give me an example of one specific instance where you've had a lack of control of your own trading psychology, and it's caused you to lose money? Sure. Psychology and trading is, you'll either learn the pain of discipline or the pain of regret. I'd rather learn the pain of discipline. The best way to eliminate emotion from your trading is through stepping away and swing trading. When you get more involved, the biggest thing that can affect you as a trader, if you have your plan, and cause you not to stick to it is emotion. If you get emotional, which is part of the psychology of trading, you're going to have instances. That was always a weakness of mine as a trader, especially when I was day trading. Because I could always make good money on good days, but if I was having a bad day, I would be unable to accept that loss. I would try to dig out of it and trade harder. I would end up turning a small bad day into a really bad day. That was because I didn't control my emotions, I didn't accept losing. One of the big things I learned for myself, and especially to teach others, is accepting losing as part of trading is going to make you more successful. In terms of a specific example, there was a stock once that a doctor told me about that he said was going to be the Microsoft of bio-tech stocks. It was under $2, which is one of my rules. I don't trade stocks under $10 The story sounded so good, and I just kept buying more and more and more. In my head, I wasn't trading the stock anymore, I was trading the idea of where I was going to spend all that money. They passed their phase one and phase two trial, but they failed their phase three trial. I ended up losing $180,000 in the trade. That, getting away from the analysis and getting involved based on just what I think would happen to the stock, definitely cost me a lot of money. Adam: What has been your biggest success in trading? My biggest success trading. Pretty much starting from the point where I was 21 years old, I used the market as a vehicle to pay for everything that I have in life. It was a job that I loved. They say if you find a job you love, you never have to work a day in your life. It was something that I was able to be above average at. I was very good at it, and when you find something that you're good at and you embrace it, it gives you enjoyment. Then in terms of being able to teach other people how to do that, because teaching by itself is a completely different vehicle. Some people could be great teachers but they can't trade, other people could be great traders but they can't teach. The ability to be able to have success trading and show other people how to emulate that success has been something that I've been very proud of. In terms of individual days, I'll also say, they always say, as a trader, you want your best up day to be better than your worst down day. I told you that I lost $180,000 in a day. I came in and I made $220,000 in a day. That was my biggest monetary trading success. Overall, I'd say having found, in these last seven years, the discipline to trade without emotion has led to the most consistency I've ever had. Adam: That kind of rolls right into the next question. Would you say that's the best lesson you've learned as a trader? Or do you have a different lesson that you? The best lesson I've learned as a trader is, again, to keep emotion out of the equation. Never go based on what you think, only go based on what the stocks are showing you. Keep the positions small enough that they're manageable. The best lesson I've learned is that if you're going out with positions and you're losing sleep over it, or you can't take your eyes off the computer, then forget everything else there is. You have too much. Because if you're trading methodically, and you're effective and you're trading within your comfort zone, you're not going to think about it outside of just acting out the trades. The control I've gained, learning to control myself as a trader and manage the way I trade so that it's a lifestyle, is the best lesson I've learned. Adam: What do you think the number one reason is that certain traders fail? Because they can't be consistent. Either they have information overload, so they keep changing what they're doing, or they become so overwhelmed that they just stop. When people try something and they commit to it, they're going to be successful, at least moderately. When they start and then stop, or they just create something where they're constantly changing, I think that lesson, in terms of, it's why people fail in business, too. If you find something that works, it's not supposed to be exciting. It's supposed to be consistent, and you want to keep doing it. If you're in life and you have a business that's working, and you're selling t-shirts, and all of a sudden you say, I'm going to go into the jewelry business, and you start losing money, well, you cha
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