Monthly Archives: January 2011

Learning to Fly

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Pilots train in simulators.

No point putting many lives at risk by flying a real aircraft without proper training.

A simulator is next to the real thing. Actually, one up, they make these things worse than the real thing.

No such luck in the markets.

However much one simulates the markets, the real lessons learnt come from actual monetary involvement in the markets.

Books, theories, paper-trading, degrees, etc. don’t have it in them. They prepare you for something else, but not for the markets.

The silver-lining here is, that if we don’t want to, there are no real lives at stake here. We can keep it small in the beginning years, you know what I mean?

Small but real losses, leading to big life-time lessons. This would be the ideal result of one’s first few years in the markets.

Yes, it’s actually harmful to deadly for a newbie trader to make hot-shot profits in the beginning without having learnt the proper lessons.

Let’s see you figure out the why for this. No spoon-feeding here, right?

What Money-on-the-Line does for You

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Your system has a bio-chemistry.

This bio-chemistry is intricately coupled to the mind and the nervous system.

When your money is on the line, your mind and your nervous system start reacting.

Money-on-the-line means automatic emotional involvement. Period.

Many of those who talk about investing / trading do not have their own money on the line.

Thus, they are not qualified to talk about investing / trading. Do not listen to them.

Instead, listen to your own bio-chemistry. It will teach you.

That’s what money-on-the-line does for you.

A Level-Headed Approach to the Markets

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There’s lots to choose from in the market-place.

Many seek a profession in the markets. If you belong to this category, first spend as much time as possible trying out as much as you can from the vast choice this multi-faceted international trading fraternity has to offer. Develop a feel for things. Your first goal is to identify a niche-segment for yourself. It will take as long as it takes. Have patience. Are you more comfortable with equity rather than commodities, which are even more volatile? Are you just happy doing arbitrage? Or, do you prefer options? It’s questions like these you are trying to answer at this stage.

Remember, the markets don’t require an MBA or any other recognized degree qualification for one to be successful. Honestly speaking, degrees are a hindrance, since the teaching is done by professors who are mostly theoretically active.  One out of a hundred market-teachers actually plays the market with his or her own money. Thus most or all one learns about the markets in college is not really relevant.

Wanna learn to be successful at the markets? Then play them. With your own money. Day in, day out. Feel the pain of loss. Feel the pleasure of profit. Make all the mistakes you can at this stage while things are still small. Let’s see you taking small losses and letting profits run, the easiest thing in the world to say but the hardest thing in the world to do. Let’s see you starting to get the basics right at least and then building up from there.

Thus, slowly but surely, identify your A-game, i.e. your niche-segment. This is the area you are most comfortable moving in. And that’s why, when developed properly, this area will give you a regular income very soon. Since you are comfortable in the area you move in now, that’s your next goal: A Regular Income.

More on that some other day…