5 Keys to Trading Success

This article is worth millions of dollars! Trading is simple yet extremely difficult, let me explain. First let me give you an example; building a house is fairly simple and common for contractors and architects, that is. Hundreds of houses are being built every day. But if you or I tried to build a house, we would have one big mess and might I add; one big headache! So what’s the difference between contractors and me? Simple, they know how to build houses and I don’t. The same goes for trading the markets! If you don’t know how to trade the markets, trading is going to be extremely difficult, if not impossible. People have to go to a 4 year college for almost every profession, but when it comes to trading, they jump right in with virtually no training. This can be devastating for you and your finances. So please, DO NOT TRADE without getting the proper education!

There are 5 essential keys for trading success. They are:

1. Sun Tzu says, “He will win who knows when to fight and when not to fight.” The trader who knows when to trade and when not to trade will be successful. Sounds easy and reasonable but when it comes to money people usually aren’t reasonable. You don’t have to trade every minute of the trading day; in fact, if you do the odds of success are slim to none! The #1 Key to trading is having the patience to wait for the right opportunities. This is easier said than done. Have the patience to strategically wait for the right opportunities takes discipline and most traders do not trade using reason or discipline. My best saying is “Learn to do Nothing”!

2. Sun Tzu says, “He will win who knows how to handle both superior and inferior forces.” Meaning, he who knows how to handle both wins and losses; good times and bad will be successful. I love losers! That’s right! I love both my wins and my losses. If a trader cannot be indifferent when it comes to winning and losing, he cannot and will not be successful. Period! You will have losses. The key is to lose fewer times than you win. You have to remember this is a long term venture. I like to consider trading like a football season. There are four quarters in each game (1 year). Each year is one game. 20 games in a season, so you can see it’s a long season (20 years).  You must think LONG TERM; I can’t state this any clearer!

3. Sun Tzu says, “He will win whose army is animated by the same spirit throughout all its ranks.” The trader that is in the same spirit with the market, himself, his system, money management and discipline will be in harmony; i.e. successful. If you or your system is not in harmony with the market, you cannot succeed. First you need to understand that the market is NEVER wrong. When traders lose it means that they are not communicating with the market properly or not at all. If you understand that the market is NEVER wrong and that the market flows, you will be able to communicate and co-exist with the market. You must understand that your communication with the market will NEVER be perfect; therefore, you will always have losses. If you cannot handle losses, do something else. Trading, like life, will be full of small bumps in the road and great triumphs. The key is making sure that they are SMALL bumps and GREAT triumphs.

4. Sun Tzu says, “He will win who, prepared himself, waits to take the enemy unprepared.” Attack when it’s time; be patient. Trading first and foremost is about managing risk, and one of the key secrets to successful trading is knowing when and when not to trade. As successful traders know, you have the advantage over the markets if you pick your points and you’re patient ‐ if you wait for your trading method to setup properly to give you the best chance of success where the opportunity for profit is high and the risk of loss is low. I always say, “Lose your patience, lose your shirt.” and “Patience is not a virtue for a trader, it is a necessity!”

5. Sun Tzu says, “He will win who has military capacity and is not interfered with by the sovereign.” This is crucial. You must be studied in the art of trading and not interfered with by things that do not affect your trades, such as, taxes, commissions, gains, losses, clients, IB’s etc. Do not let these items affect your trades, trading strategy, or your trading plan. Trading is hard enough without worrying about these items.

I seriously hope you read this article several times. Like I said earlier, this article is worth millions. Get the proper trading education. Here are some general attributes that a good trading method should have. Does your current method exhibit all these properties?

•         A good method is one that is easy to understand or else you will not follow the method even if it produces favorable results.

•         A good method will use no more than a handful of technical indicators from the hundreds available, but use them in an uncommon way to give the trader an edge over other traders. My indicators are not the normal indicators you see on most traders charts. I’ll talk more about this in a minute.

•         A good method will provide you with an edge (that puts the odds in your favor) when trading the markets, but it will not be a black box mechanical system that spits out buy and sell signals with no forethought. This is a common misconception on the part of beginners and is driven by the erroneous belief in the Holy Grail.

•         A good method also allows you to easily manage your trades once you have entered the market requiring only minor adjustments to your stop orders each candle. If you are following me on the daily charts then you only have to make decisions once a day for about 10 minutes.

•         You know; Smart traders are nodding their heads right about now, and they also know that all of this can be accomplished in a matter of TIME. All you need are the Tools.

To Your Trading Success,

John Vasquez

Integrate a Good Trading System with Proper Money Management

Since there have been markets to trade, traders around the world have been looking for the holy grail of trading – a system or method that tells them exactly what and when to buy and sell to take maximum profits. There is and will never be a “Holy Grail” trading system.

The Fallible Concept of the Holy Grail

Now, if you think about it logically, if such a system or method existed, all traders would soon discover this and all would trade its signals in lock step, and, of course the markets would then cease to function, because when all were buying, there would be no sellers; and when all wanted to sell, there would be no buyers. The truth is and always has been that the holy grail of trading simply does not exist ‐ never has and never will. That’s the bad news. The good news is that the holy grail of trading is not required to trade successfully in the markets.

It’s all about the Odds

What is required are good trading methods that point you in the right direction to take advantage of higher‐probability, lower‐risk trading opportunities that set up in all markets over and over again. Now, this does not mean that every trading opportunity will be profitable or that losses will not be taken. But it does mean that with good trading methods you will have an edge when trading the markets that should put the odds in your favor.

95% of all Retail Traders

100 Trades a Month Average

Risk 1% to Gain 1% of Account Balance

With only a 50/50 Win/Loss Ratio

Wins | Losses

50         50

*1%      *1%

+50%   -50%

Total % Profit/Loss = 0%

Excluding commissions, slippage, etc.

5% of all Retail Traders

10 Trades a Month Average

Risk 1% to Gain 3+% of Account Balance

With only a 50/50 Win/Loss Ratio

Wins | Losses

5           5

*3%      *1%

+15%    -5%

Total % Profit/Loss = +10%

Excluding commissions, slippage, etc.

I Love Losers!

So by definition, there will be losing trades; in fact, losing trades are quite common when trading. Just because a trading method puts the odds in your favor does not mean you will not experience losses. And that fact leads to one of the keys to trading success. That is, you must learn to CONTROL AND EVEN LOVE losses. The whole idea around trading is to win more than you lose and to stay in the game, so that you have the opportunity to come out a winner. If you risk too much on each trade, then you can easily deplete your account size down to a level from which there is no recovery. A series of losses could wipe out your account altogether which, of course, would knock you out of the game with no chance of recovery from the profitable trade potential that followed. So you must control losses first and foremost.

It’s all about the OPPORTUNITY!

Controlling losses is referred to by many names such as risk management, money management, account risk management, stop loss orders, portfolio risk management, limit position size, etc. But they are all referring to the same thing ‐ keep your losses relatively small in relation to your account size so you have the opportunity to trade over a series of trades that has a positive expected outcome where any losses are more than covered by the profitable trades. Once you understand how to control losses, you still have to have a good trading method that will guide you in scanning the universe of currency pairs and ETFs to find the very best trading opportunities at any given time. A good trading method, using primarily technical analysis, will define fairly objective setup conditions, entry rules, stop loss rules, and exit strategies as well as the scanning criteria necessary to find those currency pairs and/or ETFs that are likely to meet the method’s setup conditions. Our Fusion Trading System meets these requirements and so much more. For more information visit our website www.fusiontradinglive.com

 Come Join Fusion Trading Today 

Email Me Personally for Your Free Guide to Developing a Professional Trading Plan 

The Independent Trader

When it comes to trading the markets, I find there are two types of traders. And the type of trader you are could drastically impact the amount of money you make in trading… it could even forever determine, in part, what the rest of your life looks like, how much longer you work a regular job, where you go on vacation (and how often), where you live, and even your overall health. That may sound like an exaggeration, but if you plan on supplementing or replacing your current income with Trading, then I think you’ll find those statements above are quite accurate. Here’s why…

Two Types of Traders

You’re probably well aware at this stage in your life that anything that requires almost little or no effort produces limited, temporary, or nonexistent results. And that anything that requires you to think for yourself produces lasting, ongoing, and perhaps even permanent results. This is especially true when it comes to trading the Forex and ETF markets. Over the years, I’ve observed that there are two types of “traders”. Now, I realize these are generalizations, but they illustrate two very common mindsets. Which one are you?

·         The Dependent Trader: This type of person is usually looking for the easy way out, looking to make a quick buck, or just wants to strike it rich. They think it’s possible to “follow the crowd”, blindly place trades pumped out by a system that “can’t lose”, and quit their job. The bottom line is that this type of trader is dependent on someone else for their financial success – forever, for life. Yes, The Dependent Trader can be successful with this attitude, but I believe the odds of success are low (probably around 5%).

•         The Independent Trader: This type of person wants to have as much control of their financial destiny as possible. They understand that when they know how the markets work, they’re empowered to place informed trades without having to rely on someone else. The Independent Trader knows they are maximizing their odds of success in the markets, which can make their financial and lifelong dreams come true that much more quickly. The bottom line is that this type of trader holds the keys to the kingdom, and has control of their financial future for their entire life, no matter what happens.

Which Trader Are You?

If you think you might have a little of the Dependent Trader mentality in you, that’s OK. I understand, because you are not alone. It’s only natural. But when you learn to break out of that mindset and move toward becoming an Independent Trader, everything can begin to change. That’s why one of my goals with this webinar is to help make you an Independent Trader. Will this webinar do it alone? No, of course not. However, it should get you on the “fast track” toward discovering the right way to trade the Forex and ETF markets for you.

OK, so you can tell that I believe it is far better to be an Independent Trader than a Dependent Trader. This is primarily because the Independent Trader armed with good trading methods, risk management, and discipline has a much greater likelihood of achieving consistent profitability than does the Dependent Trader who is always at the mercy of someone else’s recommendations. You Can Do It!!!

One of Our Students Shows How He Has Become An Independent Trader!

Just a quick note to wish you a Happy Holiday, a Merry Christmas, and a profitable New Year.  I've had some time to trade in the last week...from Tuesday through Monday.  This is my first go at a live account and I've kept the risk size limited to 0.5% per position for the first month. Even at such a timid risk, my return has exceeded 7%, plus another 3% in exchange rates since my account is denominated in Swiss Francs.  Just wanted you to know what a good teacher you are, and maybe, just maybe, I've become a good student. Say hi to my cyber-friends on the crew!!!
     Roy H.

 Come Join Us Today!
Email Me Personally for Your Free Guide to Developing a Professional Trading Plan

How to Get Started Trading ETFs

As with any investments, it is important to understand the product you are using in your portfolio. So before you decide to include ETFs in your investment strategy, you should understand the basics about Exchange Traded Funds or ETFs. I always say, “Know your tools!”

Know the Basic Definition of an ETF

ETF stands for Exchange Traded Fund. It is a fund that tracks an index, but can be traded like a stock. ETFs always bundle together the securities that are in an index; they never track actively managed mutual fund portfolios (because most actively managed funds only disclose their holdings a few times a year, so the ETF would not know when to adjust its holdings most of the time). Investors can do just about anything with an ETF that they can do with a normal stock, such as short selling. Because ETFs are traded on stock exchanges, they can be bought and sold at any time during the day (unlike most mutual funds). Their price will fluctuate from moment to moment, just like any other stock's price, and an investor will need a broker in order to purchase them, which means that he/she will have to pay a commission. On the plus side, ETFs are more tax-efficient than normal mutual funds, and since they track indexes they have very low operating and transaction costs associated with them. There are no sales loads or investment minimums required to purchase an ETF. The first ETF created was the Standard and Poor's Deposit Receipt (SPDR, pronounced "Spider") in 1993. SPDRs gave investors an easy way to track the S&P 500 without buying an index fund, and they soon become quite popular.

Know the Benefits and Risks of ETFs

Once you have an understanding about ETFs, you can learn how they work to your advantage. Understanding the benefits of ETFs will help you utilize the correct investment strategy when including exchange traded funds in your portfolio.

It is equally important to understand the disadvantages of ETFs. Before you buy or sell any investment product you need to know all the limitations of the asset. You don't want to have any misconceptions about an investment’s performance and you need to understand all the risks involved. Here are some good articles to help you understand the pros and cons of ETFs

Learn About the Different Types of ETFs

There is no shortage of ETFs. There are multiple Exchange Traded Funds for indexes, sectors, styles, and regions. It can be a little overwhelming, but if you have a better understanding of the major types of ETFs, it will help you narrow down which kind of funds will fit your investing strategy. Here are some of the major ETFs we here at Fusion Trading use:

ETFs

1.      S&P500 SPDR’s - SPY

2.      PowerShares QQQ - QQQQ

3.      ProShares Ultra Dow30 - DDM

4.      ProShares Ultra Oil&Gas - DIG

5.      PowerShares Gold Double Long – DGP

6.      Direxion Large Cap Bull 3x Shares – BGU

7.      Direxion Energy Bull 3x Shares – ERX

8.      Direxion Technology Bull 3x Shares – TYH

Inverse ETFs

1.      Short S&P500 ProShares - SH

2.      ProShares Short QQQ - PSQ

3.      ProShares UltraShort Dow30 – DXD

4.      ProShares UltraShort Oil&Gas – DUG

5.      PowerShares Gold Double Short – DZZ

6.      Direxion Large Cap Bear 3x Shares – BGZ

7.      Direxion Energy Bear 3x Shares - ERY

8.      Direxion Technology Bear 3x Shares - TYP

Small list, big profit potential!

Decide On the Best ETF Investing Strategy

Are you investing in ETFs to gain exposure to a market sector? Are you using ETFs as a hedge against foreign risk? Do you want to trade ETF derivatives against your positions? Are you using fundamental analysis or technical analysis? Are you going to use a day, swing or position trading strategy? Are you going to use a trend or range trading strategy? Are you going to take advantage of Inverse ETFs? Before you adding ETFs to your portfolio, you need to decide why you are investing in the funds. Only then can you decide which ETF trading strategy is the best fit for your portfolio.
We here at Fusion Trading International use and strongly recommend Technical Trading. We primarily use a trend trading strategy mixed with a secondary counter-trend trading strategy. We use these strategies for day, swing and position trading. You must take advantage of all three if you want to increase your chances of success! You will learn all of these strategies and more…don’t waste another minute without taking advantage of this amazing training program!

Take Control of Your Financial Future Today 
Email Me Personally for your Free Guide to Developing a Professional Trading Plan 

Learn to Trade Exchange Traded Funds (ETFs)

Everyone wants to invest their money and one of the best places to do so is the Stock and ETF Markets. After all, that’s why it was invented. But what’s the best/safest/easiest way to do it? Do you buy individual stocks? What about an index? Should you consider mutual funds? It can get confusing, which is why utilizing ETFs may be the best investing strategy for your goals.

What is an ETF?

ETF stands for Exchange Traded Fund. It is a fund that tracks an index, but can be traded like a stock. ETFs always bundle together the securities that are in an index; they never track actively managed mutual fund portfolios (because most actively managed funds only disclose their holdings a few times a year, so the ETF would not know when to adjust its holdings most of the time). Investors can do just about anything with an ETF that they can do with a normal stock, such as short selling. Because ETFs are traded on stock exchanges, they can be bought and sold at any time during the day (unlike most mutual funds). Their price will fluctuate from moment to moment, just like any other stock's price, and an investor will need a broker in order to purchase them, which means that he/she will have to pay a commission. On the plus side, ETFs are more tax-efficient than normal mutual funds, and since they track indexes they have very low operating and transaction costs associated with them. There are no sales loads or investment minimums required to purchase an ETF. The first ETF created was the Standard and Poor's Deposit Receipt (SPDR, pronounced "Spider") in 1993. SPDRs gave investors an easy way to track the S&P 500 without buying an index fund, and they soon become quite popular.

Should You Invest in the Market by Buying Stocks?

If you think an individual company has potential, then buying that company’s stock would be a good idea. However, if you wanted to invest in the stock market as a whole, you’d have to buy many stocks across many sectors. That can be a problem for many reasons.

1.      Which stocks should you buy?

2.      How many shares do you need of each stock?

3.      How much will it cost in commissions and fees?

4.      Is it risky to buy random stocks?

However, with an ETF, the amount of stocks and shares are prepackaged in one asset. There is only one transaction at one price. You don’t have to go chasing after stock prices, which can get difficult. With one call to your broker, you can have instant exposure to the stock market.

Another advantage of ETFs is that you can short the market even if you have a 401K or an IRA. If you can’t take advantage of the market when it goes down, you are only using half of its amazing potential!

Should You Invest in the Market with Mutual Funds?

Mutual funds are closer to ETFs than any other asset. They are also mini-portfolios created to follow and index or other investments. However, their goal is to not just act like the underlying index, but instead they try to beat it. While that’s not without its advantages, it can lead to higher transaction costs and risk. Stocks are traded in a mutual fund on a daily basis, sometimes without you even knowing. Fund managers sell and buy shares in your mutual fund all day long with the goal of trying to beat the market. Sometimes it works, sometimes it doesn’t. However all of those daily trades can rack up your commission bill.

Taxes play a huge role with mutual funds as well. If your manager sells a stock higher than he bought it, that is a capital gain. Uncle Sam wants his share of that gain right away. And sometimes you don’t even know about it right away. One of the disadvantages of mutual Funds is that they are not very transparent. You never know what’s in your fund, what trades are being made, or what are incurring capital gain taxes until you get a report.

With an ETF you don’t pay capital gain taxes until you sell the entire asset, you always know what’s in your fund, and there’s no daily management (with the exception of actively managed ETFs).

Should You Invest in the Market with ETFs?

Most definitely, YES! If you are looking for general exposure to the stock market without a high level of risk, costs, or complications, an ETF may be your best bet. It’s a simple investment product with minimal transaction costs, huge tax advantages, and many other benefits.

To aid you on your quest to investing in the emerging ETF market, visit http://fusiontradinglive.com. Learn to trade ETFs in the live trading market, that’s right LIVE! We take you by the hand to teach you step-by-step, from pre-market analysis to closing the trade and documenting the outcome in your exclusive trading journal; all during market hours. But we don’t stop there. Next we teach you discipline, patience and money management, without these it doesn’t matter what trading system you learn! This is the most extensive and complete course out there. Teaching you everything you need to know about trading, not just in one market but in the two largest markets in the world (Forex and ETF Markets) and if you can trade ETFs, you can easily take what you have learned and use it in the Stock Market...3 markets, 1 amazing system! This is the best training money can buy! I’ll see you in the Live Trading Room!!!

Start Taking Control of Your Financial Today!
Email Me Today for Your Free Guide to Creating a Professional Trading Plan