There are many dealing techniques and techniques out there. There
are many no cost ones produced in dealing content, magazines, guides and on
trading-related sites. You can buy them as application or you can sign up to
them regularly.
Novice investors say they do not have time, the skills, the
ability nor the heads to perform out how to business effectively. They would
rather buy a system or sign up to a dealing plan for countless numbers — or in
some situations — countless numbers. They say they do not have to do anything
except be informed what to buy, when to buy and how much of it you need to buy.
Some ask me if this technique or strategy is recommended for dealing the
marketplaces. To response this concern, I am then required to consider the pros
and cons of using such an strategy to dealing.
There are factors why a investor would use a system or technique
that someone else designed and tested:
1. It is simple. A beginner investor does not need to research how
the industry performs and how he communicates with that industry. He does not
need to inform himself: he does not need to hassle with guides and workshops.
He does not need to analyze the system, since the owner has already done that
for him and revealed ensuring theoretical or real outcomes.
2. A beginner investor wishes to get a dealing plan at a 'bargain'
price: sometimes even for no cost.
Hazards of dealing a system or technique designed and examined by
someone else are the following:
1. Defective Systems
There are many faulty techniques out there. They may be faulty
because their presumptions and their systems may no more be real, precise or
legitimate. As a beginner investor, how can you identify between the excellent
techniques and the bad techniques if you don't know how dealing techniques are
built?
2. Self-discipline and confidence
All techniques have drawdown times. Some excellent techniques may
not earn cash for six several weeks or an whole season. Even if it was a
excellent system, can you keep adhere to it even if it gives you a reduction
after a reduction after a loss? How can you adhere to it if you do not have
assurance in it? How can you be assured if you do not know the way it operates
of the system and if you have not examined it yourself?
I do not believe that individuals would thoughtlessly adhere to a
system even if they were informed that it would carry them money. I can provide
someone a dealing plan, I can provide him with remarkable theoretical or real
outcomes and still, he would not be able to adhere to it.
I keep in mind providing my dad a fully-mechanical dealing plan I
designed. I informed him a few simple guidelines and I informed him not to
concern them. All he had to do was to adhere to them. We both exchanged it for
two several weeks, I matured my little consideration by approximately 50% (it
occurred to be a excellent two months), but he was dropping. He considered why.
I requested to see his dealing information. When I checked out his dealing
information, I discovered that he kept disobeying the guidelines. When I
requested him why he disobeyed them, he desired to increase the outcomes after
it had a number of dropping investments. He was trying to increase the outcomes.
According to him, the system requested him to do what he believed was not right
during certain industry circumstances, so he did not adhere to it. I discovered
simple mistakes too, such as starting investments at rate instead of awaiting
trade quit purchases at assistance and stage of resistance stages to get
activated. I also requested that he completes investments at the near, but
frequently he exchanged two time before or after the near at his attention.
There were many more guidelines he breached. He is a sensible man: a former
municipal professional and now a administrator for a big enterprise. Why could
he not adhere to instructions? It is simple. He did not know the factors behind
the guidelines I had set and so he did not appreciate them. His cash was on the
range and after a sequence of failures, he missing trust in the system simpler
than I did because he did not create and analyze it himself.
To get over the risks above, I see no way except for a investor to
understand how to create his own dealing technique. This is the only way a
investor can know if a particular system or technique is excellent or not.
Once a investor understands how to create techniques and
techniques, he can then be better outfitted to analyze them as well. By this
factor he might even discover that he is better off using the system he
designed, because it becomes significantly hard to discover another system more
suitable for his revenue goals while managing within his danger threshold
stages. It is likely that once he produces this stage of proficiency, he will
basically obtain other techniques only to dissect them, pick up the areas he
prefers and add them to his own system. To me, the paradox is that for a
investor to know which system to buy, he must first understand how to create a
system. And after understanding how to create a system, he will no more have
the need to buy one.
In summary then, I would have to say that if you are not prepared
to understand how to create your own dealing technique, then perhaps you should
consider providing your cash for someone else to pay. Provide to someone who is
dealing a system that he designed and examined himself because he is more
likely to have the assurance and guts to adhere to his own
