Throughout my years of investing I have had the opportunity to be a
part of many different experiences – some good and some bad. What
I have learned by being trained and working with investors in all
different markets is that the discipline to follow the fundamental rules
to investing can make or break someone’s bank account. Sadly, I’ve
seen a lot of great investors go from multi-millionaires to dead broke
in a matter of minutes because they became foolish.
Whether I have seen a stock trader or someone who works in the
options and futures pits, I have found that when they lose their shirt it
is because they didn’t stick to the basics.
While even amateur investors know these basic rules to investing, it
is much easier said than done. Maybe this is because most investors
have a competitive edge, and we think we can out-perform or
outsmart the next guy. But the bottom line is it is pretty tough to
outsmart the market.
Investing is a zero sum game. For every winner there is a loser,
which is what keeps the market efficient. Knowing this, it is possible
to develop an edge in order to win more than you lose. This is why
some of the best trading systems make people so much money.
These systems have found a way to analyze trading opportunities
and automate the process so you can get in and out of trades quickly
and profitably.
However, many investors and professional traders still manage to
end up in the red. These investors are unsuccessful because they let
emotions get in the way, are too stubborn to be successful, or they
think they know something other people don’t. They can literally have
their trading system screaming at them to get in or out of a trade, and
yet they ignore all the signs.
What these losers fail to realize is that the market is irrational
because it is driven by emotion and institutional houses throwing
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