c05 JWBT016-Busby September 30, 2008 13:49 Printer: Yet to come
64 A FOUNDATION FOR SUCCESS
and trade the numbers, not their hopes, dreams, or fears. Even with the
best analysis, when emotions get in the way, money will be lost. Part Three
of this book deals with the nonanalytical parts of trading. It is these factors
that are the most difficult to master. I have seen many “wannabe” traders
who think that they can learn a one, two, three-step approach to trading.
Unfortunately, trading is far more complex than that. Having a high IQ does
not translate into being a good trader. It may help with analysis, but if you
are unable to balance fear and greed or if you cannot accept the fact that
you can and will make mistakes, you will not be successful. The financial
markets have a way of keeping even the best of us humble.
When money is on the line, a winner has to be able to keep a cool head
while properly reading the indicators and making good decisions—not
emotionally charged ones. Winners must respect risk and manage their
money. The right combination of intellect and emotional stability is essen-
tial, and there is no substitute for experience. In addition, you have to have
enough capital to play the game. As the old adage goes, it takes money to
make money. For that reason, risk management is decisive. Knowing when
to hold ‘em and when to fold ‘em is a critical aspect of trading. For all of
these reasons, I speak of the art of trading.The Steps to Win
I.Evaluate the Seven Sisters
1.S&P 500 futures
2.Nasdaq 100 futures
3.Dow 30 futures
4.Dax futures
5.Gold futures
6.Oil futures
7.Bonds
II.Gather Important Numbers
1.Yearly opens
2.Monthly opens
3.Weekly opens
4.Daily opens
5.Bars of reference (high and low in the following 30-minute time
frames):
3:30–4:00PM
3:30–4:00AM
8:30–9:00AM
12:30–1:00PM