c02 JWBT016-Busby September 30, 2008 13:33 Printer: TBD
24 A FOUNDATION FOR SUCCESS
But, regardless of the changes in technology or products, the ba-
sics of trading, like the basics of baseball, remain the same. Winning
traders still have to buy or sell at the right price and the right time.
They have to make wise and informed trading decisions, and they must
have the strategies and the skills necessary to earn money and preserve
it long enough to take it to the bank. And, to be a successful trader,
you must be able to ply your trade in good times and bad, bull and bear
markets.
At the time of this writing, the mortgage crisis is having a dramatic
and negative impact on our economy. Consumer confidence is lagging.
Oil prices are soaring. The dollar is suffering badly, and many investors
and traders are in a quandary as to what to do. The stock markets take a
dive one day and rally a few points the next. Unless some factors change
quickly, 2008 will not be good for most traders. Many are confused and ner-
vous because they only know how to make money in bull environments.
When the bull stops running, they do not have a clue as to what actions
to take. However, traders who have the knowledge to trade a variety of
products, including options and futures, and those who understand how to
trade in bullish and bearish markets can make money regardless of market
conditions. This is the best of times for educated traders. Many of those
who are educated about the markets are making a fortune. Knowledge
will pay.
Luckily for me, over my lengthy trading life, I have seen good times
and bad. There have been days when the trading session finally ended
and I felt like an old work shirt going through a wringer. I remember the
bulky, noisy washing machine my aunt had on her back porch. The clothes
washed in a large vat, but in order to finish the job, she had to run them
through the wringer and squeeze the excess water out of each garment.
On more than a few trading days, those clean clothes and I have had a
few things in common—really wrung out. Other days, the market is easy to
manage, and when the session comes to a close, I swagger from my desk
knowing that I had the knowledge and the skill to make money on Wall
Street.
Through those years of experience, I have identified some basic ele-
ments of trading that help me survive and prosper. One of the most im-
portant elements is time. I divide the 24-hour trading day into four time
segments. There is a major market event or events in each segment. These
events serve as guides, or at least informational points, along my trading
route. Visualize trading around the world and see the whole picture. This
will add consistency to your trading. I live in the central time zone.All
times that I use in this book, whether specifically noted or not, are
central time.Please remember that fact when reading all of the strategies
and information offered.