Sometimes when I am talking to students they ask, “Aren’t you afraid of giving too much of your trading strategy away as it may not work if too many people learn it?” As long as I have been trading and investing, I have been a bit worried about creating my own competition as proper trading means having an edge over your competition. Without it there’s really no way to profit; you will lose your account to someone who has a better edge than you. Specifically, you must have a rule based trading strategy that has you buying before your competition buys and selling before your competition sells, consistently. However, higher level than that, I have always wanted to find a way to create a win – win for all. Meaning sharing the strategy so all, including myself, can benefit and live a better life.
Over time I have become less and less concerned because what I have come to realize is this: Proper trading and execution of the supply and demand strategy is very simple, but not easy. Let me explain using an example from last week’s Supply Demand Grid and the Japanese Yen.
Negative Yen News April 5, 2017:
OTA Supply/Demand Grid April 5, 2017: Yen:
The bad news comes out, many hear that bad news and start selling because that’s what most people do (not because it’s the right thing to do). All the supply coming into the market from that news pushes price lower as you can see on the chart. Price will keep falling with all that supply until it reaches a price level where demand exceeds supply (our Demand zone on grid). Profitable market speculators however, have a trading strategy that dictates buying and selling based on one thing, price. Meaning, they buy at wholesale (demand) and sell at retail (supply). There is no other way to profit buying and selling anything. Most traders and investors make decisions on news and feeling. This is what separates the profitable market speculator from everyone else.
As for my issue of creating my own competition by sharing my trading strategy, I am less worried than ever and if I can help a few people achieve their goals by sharing how money and markets really work, I am happy to lead an instructor team and do that. There are plenty of markets to trade and even if there weren’t, the powerful human emotions of fear and greed will keep plenty of people from buying where I buy and selling where I sell. In fact, these emotions typically have people buying where I sell and selling where I buy. In a perfect world, everyone would win and be profitable, there would be no losers, no frustrated traders. Unfortunately, this is not how the world works. Before you put your hard-earned money at risk in the competitive world of market speculation, make sure you know what you’re doing.
Hope this was helpful, have a great day.
This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results.