The Making of a Trader

It was 1964 and I was a brand new 2nd Lieutenant in the Air Force.  I had just acquired my new MG B model and I thought all was right with the world.  At that time I took my first step into the stock market.  The step was tenuous at best as I made a small investment in the Dreyfus mutual fund.   Contrary to the charts I had been provided on the funds history, I did not see these magnificent gains.  Not to worry as I was soon more concerned about my safety than my gains when I was “invited” to join the others in Vietnam.  During that period my attention was anywhere but on the market.   However, that experience was such that I had a new perspective about my future.  I knew if I were to have expectations of a  rosy financial future, I needed to start doing things then and not later.

That long forgotten mutual fund was still hanging around, but I knew I needed something better.  Yet, I was uncertain of how to proceed.  I bought real estate in Florida that was to be my pathway to wealth.  I was lucky to get rid of the Florida land without a loss after several years.  Then there was the venture into income properties and though they were profitable they were far too much of a headache for a military man that was likely to move at any time.  One day, I was invited to attend a seminar conducted by a broker from Merrell Lynch hoping to acquire new clients.  I found his presentation fascinating and I was very excited by the little books with the out dated charts in them.  I was sure that now I had been giving the keys to the vault and I only had to put a few dollars to work.  Much excited, I was sure Berkey Photo was going to make great gains.  It was certain as I could see it all on those little printed charts.  No you won’t find it listed today and that tells that story, but I was able to get out of it at a small profit.  Other purchases had varying results but nothing that would indicate that I knew what I was doing.  For years, I bought and held various issues and basically struggled to match the inflation rate.

Hopefully others can make use of my faulty start by avoiding it all together.  So if not stocks then what?  There was nothing wrong with stocks just the actor playing at investing.  Frankly, the stock market offers an excellent way to accumulate wealth, but if you do not have a sound plan it is also a good way to pay for others’ successes.  It has been my experience that stocks are the easiest investment to make.  People tell me they simply do not have enough money to buy stocks and they attempt trading futures which are even more difficult than stocks and require a bit more fineness to get it right.  But money makes money and everyone has to start somewhere.  The problem is not they do not have enough money; the problem is they never attempted to accumulate that money.  They were far more interested in buying things than making an investment in their future.  It does not take a lot to money to buy stock.  You can buy 1 or 2 shares with the low commission rates that are available today.  Of course, it will take a while to accumulate your wealth but everyone must start somewhere and if you do not start it surely will not happen.   I know this because once I started seeing how things were to work, I started this exact same way and I did not have the low commission rates of today.  But I persisted and I bought solid stock like IBM and over the years it grew as we now know it did.   In the early days NCR as also a good bet.   In fact, both did relatively well in 2016 but did not fare so well in 2017.  I have long since been out of both those and moved on the more aggressive stocks.

You do realize that I am skimming over the top and leaving out a great deal of pain and work it took me to gather the knowledge I needed.   But now I want to talk about that for a bit.  Trading is about understanding how the market works.  Many people think trading is easy, but the fact is, it is not.   Fortunately, it can be learned with a bit of dedication.  Like any other area of study, one must make some commitment to learning the subject.  There are as many different trading methodologies are there are personalities, but they are not all equal.  Those methodologies are based on two camps, technicals and fundamentals.  Now I realize that these are broad terms and in fact an individual generally uses a combination of each.  Here in lies the difference.  Technical traders use charts and various indicators to attempt to determine the prospects of future success.  Fundamental traders focus on things like value, ratio, volume, income, price to earnings just to name a few.  In other works they basically go over the books to attempt to determine if a stock is a good buy.   There is an ongoing debate about which is best and I am not sure there is a winner is that discussion.  However, since techinicals allow us to graphically depict the prospects of a particular issue, you will find this website concentrates on technicals.  The basis of technical trading is observing how the people who are buying and selling a stock affect the price.  Regardless of what the numbers are on the company books it is people who affect the price direction.  It is our premise that understanding that influence of the people will enable us to get a feel  of where the market is going.  You can do an internet search and find many discussions at length on both the technical side and the fundamental side of trading and thus is not my agenda here.

During my evolvement, I acquire the services of a paid mentor and I was fortunate to get one that worked with me and helped me find a way.  In the end, each trader will take what they have learned and adapt it to their personality.  It took me many  years to come to a thorough understanding of what makes the market tick.  Today I can take a simple candlestick chart and learn all I need to know.   That is only because I really learned how to read price.  I learned how to tell what momentum was doing and what price was likely to do in the future.  I could see how the bulls and bears pushed price around and I could see who was winning.  I was really excited by this and I wanted to be able to share this information with my friends.  I knew that would require years to  teach them and I had to come up with a different approach.  I decided that a series of algorithms could be constructed to depict what was happening.  Unfortunately, I could not explain to someone in a  precisely how to construct those algorithms, so I knew I would have to do it myself.  My only choice was to learn how to script and that is what I did.  From that I developed a chart display that showed much of what I was able to determine by reading price.  That along with some basic trading rules and I had all that anyone needed to successfully trade the market.  Sure there were some things that still needed to be learned, but the learning curve had been greatly reduced.

The market has been kind to me.  I was even able to avoid the massive losses many experienced in the 2008 drop.  Today I trade my own accounts, but I can only handle so much and still have a life.  So I have established a managed account with people I know that will trade based on parallel trading concepts.   Both have done well.  The moral of the story is simple.  The better your tools, the harder you work, the greater your chances are at success.

The products you see on this website are a considerable improvement over that first chart display and they are the result of a lot of work and testing with my associates.  We are pleased to share them with you and hope they will help you find your path to success.

Leave a comment