“…And then people make the mistake of not working hard enough to keep improving.” - Stephen Temes
Since 1998, Adrian Manz (PhD) has been a great market speculator,
writer and speaker at trading conferences. He’s been earning his own
livelihood for many years, having traded the stock markets since 1988
(making over four per cent every month). His trading methodology employs
the use statistics, chart analyses, and economic issues when making
trading decisions.
His trading methodology has been used perseveringly and prosperously in
the unpredictable financial markets. He wrote 2 books titled: Around
the Horn: A Trader’s Guide To Consistently Scoring In The Markets” and
“Trade Secrets: Powerful Strategies For Volatile Markets.” Dr. Adrian
was interviewed in TRADERS’ in October 2012 edition. The quote at the
end of this article was taken from that interview.
Lessons
We can learn many lessons from Dr. Adrian Manz ‘s career:
1. Dr. Adrian previously had another type of career,
but was also busy studying the markets. With the support of his loving
wife, they came up with some sound trading ideas that they worked upon
and tested until the methodology became sensible and reliable in the
markets. They practiced and practiced a lot. That’s what has brought
them financial freedom. Do you have a day job? If yes, that’s great. But
you’d also do well to give some consideration to trading. Think about
the future, when no-one would need your services because of old age.
Many professional traders were formerly doctors, engineers, lawyers,
athletes, etc.
2. A good trading strategy must be applied with
disciplined before you can get favorable results. That one doesn’t mean
that you strategy must be complicated. If a good strategy is applied to
trading without discipline, the result would be negative. So a good
strategy + discipline = profits.
3. Can you find a good trading system that can give
you a good statistical edge? Have you found one? I don’t mean a strategy
that will make you 50% per month, but the one that would give you
consistence results per month (though little). Dr. Adrian hasn’t had one
negative month in about 100 months, although the monthly result is
below 5% on average. Can you see that there are successful traders that
achieve decent results? Please try to be like one of them.
4. The fact that a strategy is good doesn’t mean that
it can’t bring losses. What matters most is how the losses can be
managed effectively so that you still come out ahead in the long run.
Once a position is opened, the rest of the thing is managerial. How do
you manage you open trades?
5. Do you use break even stops? Do you use judicious
risk-to-reward ratio? Even a losing position can be managed properly.
Whenever a position goes negative by a predetermined amount of
percentage, Dr. Adrian would cut it, even if it hasn’t reached the stop.
6. Most often, many people have too high expectations
from the markets. Thinking that you need to win at least, 9 out of your
10 trades, is unrealistic. Unless you use a negative expectancy system
(whose average losses would be greater than average profits ultimately),
in which you risk $500 to win $5 on each trade. The idea behind this is
to hit a profit quickly, while a negative position is given enough
chance to come back to breakeven or positivity. Many people like this
kind of trading mindset. But, do you think it is rational? Because of
the constant uncertainty in the markets, many people think trading is
difficult. Yes, it’s difficult, and that is a fact we should always
remember. As a result of this, you need a trading methodology that fits
you and agrees with your rational psychology.
You shouldn’t measure your progress by how much you win or lose, since
that isn’t a good way of doing that. Focus on trading your ideas
faithfully – sticking to your rules staunchly. Based on your preferred
timeframe, you might want to check your trading results once every
month, every quarter, every six-month period or every year; not every
day.
Conclusion: Experimenting with a trading methodology
with different parameters would give you a bird’s eye view idea of the
reliability of such methodology. However, this doesn’t necessarily
signify it as a methodology that would surely bring positive expectancy
in live market conditions. An astute speculator would simply remain
loyal to the methodology, and it’s an area in which correct psychology
is mandatory.
The article is ended with a quote from Dr. Adrian:
“I have been proven to achieve good returns, so I stick to that
method. Many traders want to keep using such a setup on a long term
basis, but in the end fail to stick to it… It is only from live trading
that you can learn and then improve your performance. My confidence is
based on my extensive trading statistics showing that my method and
different setups work when you stick to them consistently.”
Pertimbangkanlah secara matang bila anda akan memulai trading forex. Forex trading memiliki tingkat resiko yang sangat tinggi. Anda bisa kehilangan dana dalam jumlah besar bahkan hingga seluruhnya. Kami tidak bertindak atas nama pialang berjangka manapun dalam melakukan trading forex.