TONGUE IN CHEEK
With tongue in cheek I have stated, “Machines recognize Wall Street, but the human thoughts can not”.
Efficient MECHANICAL TRADING Method
But seriously what I am truly saying is that employing a personal computer and an powerful mechanical trading program to make constant genuine funds in the stock marketplace is the only way to go.
Almost 20 years ago even though on a skiing trip I created a trading process, written on a yellow legal pad at that time, that, with a handful of modifications, I continue to trade to this day. I subsequently programmed this trading program, wrote a book, “How I Quit My Job and turned $six,000 into a Half Million Trading”, and I even published a hundred pages of my broker statements.
I stay sensitive to the truth that lots of have a tendency not to think that my special method to trading performs and right now I satisfy my want to “prove it” by placing my genuine time trades in 96 stock on the Web many instances a day. I also post all the trades currently taken, and previously posted on this exact same net web site, going back to December 2009.
My purpose now is the exact same as usually, to get at least 100% annual achieve on my investment and to do so with incredibly low danger.
WHY USE A Laptop or computer?
When most folks commence taking about stock trading they commence by speaking about their favored broker who offers excellent advise. Or probably they speak about a excellent “stock picker” they have located on the Web. Or perhaps they do it themselves by means of lengthy investigation of a variety of firms and financial fundamentals.
In my opinion all such solutions are doomed to failure more than time mainly because they involve human judgment and human feelings. A substantially a lot more powerful and constant way to trade is to use a programmable trading program and adhere to the guidelines of your personal computer religiously day following day, month following month and year following year. And to this I may possibly add: diversify by taking lots of trades and hold absolutely nothing longer than 3 days.
Placing your personal feelings aside along with your brilliant judgment and letting your personal computer do the pondering is not straightforward. In truth judging from my conversations with hundreds of traders, handful of can do it. But if you can do it, if you have the proper stuff and if you can come to genuinely think in the superior wisdom of your personal computer, riches in the marketplace can be yours.
YOUR Laptop or computer FOLLOWS THE Method AND YOU Adhere to THE Laptop or computer
“Following the program” is what handful of folks can do. Most folks can “adhere to the program” for a handful of trades, but then if the program begins losing a tiny they will commence skipping some trades or having out of some trades early and so on. Quite quickly they no longer have a program and they are losing funds.
In order to “adhere to the program” you will have to surrender all trading authority to your personal computer and do specifically what it tells you to do, day following day, year following year. Do you assume you have the proper stuff?
WHY YOU Need to BOW TO THE AUTHORITY OF A MACHINE
I have been trading this way for practically 20 years and having these 100% returns pretty much all the time. But let me pull out an old EXCEL spread sheet to illustrate with genuine time final results just why I think in the superiority of machines.
This spread sheet is for genuine time trades I took in 1999, for 4 months, trading an account of about 1 and a half million dollars. Most do not have that sort of funds to trade, but trust me these identical solutions can be employed on an account with as tiny as $three,000.
I took 1899 trades in these 4 months and the spread sheet listed the genuine time profit and loss for each and every trade. So I began by arranging all these trades in descending order from most lucrative to least lucrative. This is some of the initial statistics I came up with:
- 1899 trades
- Most lucrative = 11,792
- Least lucrative = (-six,675)
- Net income = 437,305
- Typical trade (win loss) = 230
Please note 3 items:
1) I trade a lot in order to spread danger more than lots of trades.
2) The typical trade (win loss) appears little.
3) The returns on the initial investment are about 100% adjusted for annual return.
The trading I post everyday right now is not substantially unique from these older trading statistics but I have adjusted the trading for a $20,000 account.
But I nevertheless think in the value of bowing to the authority of a machine. Very first of all it ought to be noted that a trader could not possibly retain track of 1899 trades without having a personal computer. You are not going to locate 1899 stock picks any spot and you are not going to have time to investigation 1899 trades. The only way to trade this way is to loosen up and let the programmed personal computer do the pondering for you.
But there is yet another even a lot more crucial cause for bowing to the authority of the personal computer when trading this way. Do you recall I stated earlier that lots of wannabe traders will commence ignoring the personal computer and commence skipping some trades?
Skipping trades and ignoring your personal computer is the worst factor any trader can do.
This is why. I took this spread sheet and figured how lots of trades would equal five% of the 1899 trades. I came up with 95 trades. So I then place the top rated 95 trades into a separate column and summed the total. The sum of these top rated 95 trades was $433,116! That is pretty much equal to our net profit of $437,305 on all 1899 trades!
Place yet another way that suggests that only 1 out of every single 20 trades is going to make this program lucrative and only 1 out of every single twenty trades is going to outcome in these 100% annual returns that we are searching for. Get rid of these 1 out of every single 20 trades and we have absolutely nothing, but a lot of tough perform with no good returns at all.
So if the wannabe trader begins skipping trades rest assured he will skip these five% fantastic trades. The cause why he will usually skip the excellent trades is that excellent trades normally appear terrible at the starting. To win in the marketplace you will have to be in the minority betting against the majority and if the trade appears negative the majority will not take it. That is why excellent trades appear negative and why the novice trader will ignore the personal computer and skip all the excellent trades.
The only way about this is to park your brilliant trading thoughts someplace else and surrender to the personal computer. The personal computer will not skip trades and the personal computer will usually adhere to the program. Appreciate, HONOR and OBEY your personal computer and you will recognize riches in the marketplace beyond your dreams.