At some point, if they last long enough, traders discover successful trading is not the inevitable outcome of a good trading egy trading system. If all we needed was a good system or indior we would be successful traders. Yet clearly we are not, far from it, there are not many traders making their living constantly from the markets.

Technical analysis is a vast and well researched subject. Many heads have poured their heart and soul into trying to find the holy grail of trading: the machine, egy or even indior which will give rise to them unlimited wealth and glory. Yet with this depth of knowledge readily accessible, trading profits remain as elusive as ever.


System Vendors and the Holy Grail

When we were to choose a scientific approach to assessing technical analysis we would have to conclude it is of limited value. System vendors, though, will continue to exploit our desire to think that there really is some secret knowledge which will enable us to transform into super traders when we expose ourselves to their own secrets. It's a really tempting fable to trust in, it gives an reply to our prayers and our difficulties, it participates our ego (how great to conquer the markets and escape the drudgery of work .) And it allows usbriefly, to relinquish the painful self-doubt that we are unconsciously fighting. The machine vendors flatter and deceive us in precisely the exact same way that road vendors promote exclusive, stolen cologne, which is usually no longer than bottled water. We're easily deceived when we are told exactly what we want to hear.

Let's pretend that a machine vendor really has a system which functions as they assert. Let's also assume that his cup actually does #8216;runneth over#8217; and he sincerely wishes to discuss his knowledge as a method of repaying his great luck; and finally let us presume he charges a fee, not to his own gain, but to ensure that his clients really take him seriously. Contemplating all this, does it make sense to make his knowledge readily available in a book or a seminar? Most of us have found that trading is not simple and one of its most important challenges is after our signals, be they based on an indior or our intuition. It's really simple to doubt our sign when the moment to behave arrives, we wait as well as the chance is gone. So having learnt our hero#8217;s egy we then need to become proficient at implementing it, which brings with it a whole slew of problems that only become apparent as we try to execute the machine.

Today the issues that get in the way of executing a egy are not issues that any system vendor can resolve in a book or a weekend. In fact the machine vendor would have it all our previous problems with trading result from not having a good sufficient egy, which of course is a problem he can easily solve for us. The basic premise of the system vendor is that all the plogical issues in trading, actually all the problems we have in trading, are a consequence of not having a really good platform or egy.

This I do not think, it is similar to claiming that we could all play golf like Tiger Woods if we had a specific pair of golf clubs, or else that we could achieve the same amount of success as Pete Sampras when we used the newest racket. Most of us want golf clubs to play golf or a tennis racket to play tennis, no matter; but they don't determine our success. Tiger Woods would nevertheless be a fantastic golfer if he was disabled by playing antiquated clubs, but no newcomer golfer is going to be transformed into Tiger Woods simply by buying the proper gear. In the event the system vendor has perfected the perfect trading system and when he's developed the ability to successfully implement this system, surely the most effective procedure to talk about his good fortune would be to make a fund which we could invest in. This way the vendor can guarantee that we all receive the entire possibility of his system without any effort on our part, without us having to overcome the larger challenge of executing ourselves. Presumably for each client who learns the machine just a few manage to implement it with the finance option every client gets the entire benefit of the machine; so why not begin a fund, a much better way to share the fruits of his great luck.

Another question that is frequently asked is why doesn#8217;t the vendor display the full results of trading the machine? Instead we get remarks such as #8216;97points this morning, thanks a ##8230;grand! #8217; from a satisfied punter. In order to appraise the effectiveness of any system we need to have the ability to find the results of each trade, over a significant period of time, so we can calculate the essential statistics. If a vendor has done so well, why do #8217;Can they publish their personal confirmed trading results? Some do, but just at snippets, we want the entire lot; and not when they've had the results they assert, what have they to lose?

The reason that vendors don't publish their results and the reason that vendors don't begin funds is that their systems don't operate consistently. They operate periodically surethey could discover a lot of cases of profitable trades, but they don't work consistently. But even when their systems did operate consistently they don't publish their results or begin funds as they have not been able to conquer the implementation and implementation hurdle, they are bad traders. They could be good investigators, very good teachers and very good sales people, but they are bad traders.

System vendors can teach us the way to market products, they could teach us how to write sales letters, they could teach us the way to present, they could teach us many things, but they cannot teach us the way to trade. They cannot teach us the way to trade because they haven't learnt how to trade, their energy was spent researching and developing systems and the only way to earn money from these types of systems is to sell them.


Learn through experience

learning how to trade has nothing to do with researching and developing systems anymore than designing golf clubs has to do with learning to play golf. Trading, like any endeavour, any ability, is learnt through doing. We learn through trial and error, through getting experiences and evaluating and learning from those experiences; and of course, our learning is accelerated when we have the support and guie of someone who is further along the path of development. The skills of trading are to do with implementation, and implementation, the doings of trading. The problems all of us encounter in our trading, problems which are popularly known as the plogy of trading, are the challenges of trading, it is these problems we surmount as we develop our trading skills. The skills of performance are the equal of the basic strokes and shots which compose the games of golf or tennis. There's no point using a egy in tennis when we could #8217;t implement the match of strokes we need to have the ability to play. Knowing that we need to hit the ball deep and move our opponent from one side of the courtroom to another is of no importance when we can't hit the basic shots.

There's no point using a trading egy when we could #8217;t trade and no novice trader knows the way to trade. The problems all of us encounter in trying to make money trading stem from the fact that we don't yet have the skills of a trader. If all we needed was a system we would be wealthy; no, we need to become traders.

When you've read the Market Wizard books by Jack Schwager, you'll notice that every one of those very effective traders has another egy or platform, yet they are all successful. Their egy is not the common factor that determines their success. The common factor amongst these is their trading skills. What are such trading skills and how do we develop them ? - which is the million dollar question. We need to look to ourselves to find the responses, what are the problems we encounter, what are the behaviours which bring about our lack of success and our failures? It's beating these behaviours that move us along the route of the trader.

The basic rules of trading are cut your losses short and let your profits run, a losing trader is not doing you or both of them. When we've learnt to cut our losses and have the restraint to conduct our profits, only then are we traders. And it is through the process of our growth, as we demythologise the market, we begin to have the observations and make the distinctions that lead us to evolve and refine our trading egies. If we could have the egy of a prosperous trader delivered to us on a plate would it be of any value to us? I don#8217;t believe so; in precisely the exact same way we couldn't implement Tiger Wood#8217;s egy, or Pete Sampras#8217;therefore, because we don't have their skills, thus we couldn't implement another traders egies without their skills. We must develop as traders first and in so doing we shall naturally evolve our own unique style and approach to trading success.
Creating Trading Skills

To build up these skills we need to get our feet dirty, plunge into the markets and have adventures. These encounters are good; they are the feedback we need to gauge our current state of development.

Without opinions we've no way of progressing. When I initially started to play tennis I did not go into a competitive match and try to win, I started by learning the basic skills of tennis, the forehand, both the backhand and the function. As a newcomer it was ordinary, expected , for me to strike the ball repeatedly in the net or hit out it sailing; this just indied I needed to work on those shots. Imagine taking this approach to trading. Lots of losing transactions is to be anticipated for the novice trader, it is the very first feedback, which reinforces the fact that the very first ability of trading is to cut losses short. A Novice tennis player should learn how to control the ball so that it lands from the courtroom; the novice trader should learn how to restrain his losses. This is how we learn; it is a cycle of trade #8211; comments #8211; adjust. What are the steps for going about the business of trading skills?

If you're new to futures trading there are particular facts you want to know. This info will be covered in the majority of good books and seminars. Whenever you have the technical information you require, start a trading account and begin trading. As a novice it is helpful to exchange an easy, logical system. This appears to contradict the stance I took against program sellers above, but exactly what I am talking about here is a systematic way of having a view of this market. My objection to the system vendors is that they assert that their system is all that's needed to become successful, whereas in reality it is the ability to implement a system or egy that determines success. As your trading skills evolve, your ability to see the market will evolve; but until then you will have no valuable view, so a simple, logical system will give you a reason to buy or sell.

In giving introductory seminars I have previously demoned a couple of viable systems, which are a good beginning point. In attempting to exchange these egies two things happen; firstly you find the issues that you have that you need to solve in order to progress as a trader; and second in the course of trading the system that you begin to make observations and distinctions that will let you be more discerning about picking traders. The issues that you come up against will be the feelings that arise that prevent you from executing your system perfectly. you are no more a victim you need to neutralise these feelings.


Get help

I believe that to have some kind of support whilst growing as a trader is critically important. A trading coach, for want of a better phrase, can help you to navigate if you are feeling lost, and will give you an objective perspective when you're wallowing in uncertainty and doubt. As a beginner floor trader I found the aid of my backer in developing trading area essential. Support does not need to come out of a professional coach, two traders could support each other, or a novice trader could seek a mentor.


In summary:

* We need to possess the knowledge of the principles and resources of this game.
* There is not any system or egy that will turn a novice or shedding trader into a consistently profitable one.
* Do not waste money on systems, they have very little value in themselves.
* Systems, however, are still an effective starting point to develop out of, but you should be aware that no system confers the skills to use it, these have to be developed over time.
* Trading is a game of skill, these skills are developed through experience, feedback and also the ambition to evolve.
* Finding some kind of service will speed up our progress.


Malcolm Robinson is a former LIFFE floor trader who currently trades his own account as well as providing eduional material for futures trading.