T2W Trading Community

Trading - The Tools (Brokers & Systems)

Which brokers do you use and why?
I use a broker at Refco. I am happy to pass his name on to anyone who is interested. This is a broker who I have personally trained, and who knows how I and my students trade. I stay on top of him like flies on sugar. I want to make sure he executes in the ways I demand of him. I want a broker who is extremely responsive. It has taken 3 years to get him where I want him to be. I use this broker for all of my futures and options trading. However, for forex trading, there is only one satisfactory broker on this planet. I will refer people to him if they are interested.

What software do you use and why?
This is not a fair question for me to answer. I use a number of different trading programs, but I receive them all gratis. Some are good for one thing and some are good for other things. I have never found the perfect software. I gave up looking a long time ago. But for those who want to know I will list them in alphabetical order. Each has its own merits and shortcomings.

1. Aspen Graphics
2. Genesis Financial Data Systems
3. NexTrend
4. Market Detective

Do you have an opinion about trading systems sold to the public?
Most of them are not worth the paper they are written on.

Do you feel a good system can compete with a good trader?
At times, yes. In the long run, no way!

Trading Experiences

In your trading experience, is there one particular trade that stands out as the most dramatic?
Yes! I was short the British Pound in February of 1991. I made a fortune from it.

What is the most prominent fallacy in the public’s perception about trading?
That it is easy and that you can get rich quick.

How much of a role does luck play in trading success?
For one or two trades, luck can play a part. Beyond that, luck has nothing to do with successful trading.

How important is gut feel?
For me it is very important. But I know very successful traders who do not have the benefit of it.

Success & Failure

How do you judge success in your trades?
I feel a trade is successful if it has met my trading goals—which are not necessarily money goals. Sometimes you need to know that you did what you were supposed to do, even though you had a loss on the trade.

What are the most important elements to becoming a successful trader?
Self-control and self-discipline, along with good trade, risk, and money management—in that order.

Can you describe one of your most successful trades?
Probably the most successful trade I ever made happened strictly because I did not lose my composure. I was short soybeans when the Chernobyl explosion occurred. I was looking at limit up. There was no way out for about 3 days. Limit up every day as I recall. I did not panic. I reasoned that because soybeans were not grown in the former Soviet Union, that the soybean market would have to come down. It did, and I shorted it from its panic highs. I ended up doing quite well overall on the trade.

Is the joy of winning as intense as the pain of losing?
Not for me. Losing is a much more emotional experience.

Why do most traders lose?
They have the wrong anticipations about trading and markets. This, coupled with genuine ignorance of the things that really should know but which are generally not taught, virtually guarantees that they will lose.

When you do hit a losing streak, how do you handle it?
I stop trading immediately. I do not begin again until I’ve figured out what was wrong.

Is the ability to accept losses a characteristic of a winning trader?
Yes. All businesses have losses. I can’t name one that doesn’t. Why should it be any different for trading?

What was your worst time trading? What went wrong?
My worst time trading came when I was not paying close enough attention to the price action while still being in a trade. It cost me $40,000. I was tutoring a student and paying more attention to him than I was to the market. Before I knew it, I was down forty grand. Trading requires your full attention. Most of my worst trades have come when I was distracted. I have learned to never have a trade on while traveling, giving a seminar, tutoring someone, or when someone needs to consult with me about anything.

Can you describe any specific trading mistakes that you learned from?
One comes to mind. Never think you can buy back and roll out of a short option in order to buy time. You never know but what the exchange will raise the margins to the point where you can no longer cover. It never happened to me, but some of my best friends have been wiped out when making that mistake.