LEARN FROM GENERALS OF THE
MARKETS - PART 18
“Many times I’ve tried to run away from unpleasant
circumstances only to discover that the problem was not the situation I was in
but me.” –
Julie A. Link
Tim Knight is a highly
proficient and experienced trader. He founded Prophet.net, which was taken over
by Investools in 2005. Between 2005 and 2010, he was senior vice president for
that company. He wrote a book titled: Chart Your Way to Profit (published by
John Wiley). He’s a very wide audience on his blog; Slopeofhope.com. What makes
him popular is the fact that he’s very skilled in making money from bear
markets. For example, he made a great fortune in the weak markets in 2008. As
an expert funds manager, he uses mainly technical analysis for making his
trading calls. He’s technical analysis addict. Tim has been interviewed by many
media, including Traderinterviews.com.
Lesson
Here are some lessons that
can be learned from Tim Knight:
- Tim
is a great bear - a bear that makes money on bearish instruments. While
some languish in falling markets, Tim thrives. You simply have to be a
bull in rising markets, and be a bear in falling markets, otherwise, your
portfolio pines away. Many people, when caught in falling markets, would
be reluctant to smooth their positions. Instead, they’d hope that the
markets would come back to their entry levels. And you likely know the
probable result of that.
- Based
on skills and experience, one can manage multiple positions at a time. For
example, it’s not uncommon for a proficient trader to have up to 10, 15,
20, 25 even 40 open positions at time. With risk control and money
management, one would manage an individual position successfully. Tim can
manage up to 200 positions at a time – diversifying his portfolios. One
who manages trades poorly can even lose if they open only one trade at a
time; whereas a good trader can manage tens (even hundreds of trades) at a
time. Interestingly, Tim has a stop loss for each position. In addition,
his exit rules are mainly discretionary.
- Tim
is another living proof (apart from Dr. Alexander Elder) that one can be a
permanently successful trader based on chart analysis alone.
- Tim’s
charts are extremely simple; not complicated, and he makes money from
that. If you make your charts complicated and intricate, you’re simply
making life difficult for yourself (and that won’t even guarantee higher
hit rate or success in the long-term). Please be successful with very
simple but effectual trading methodologies, and thus make life easy and
comfortable for yourself.
Conclusion:
Did you lose a lot of money in recent bear markets? Well, some made fortunes.
What you, perhaps failed to acknowledge is that bulls suffer in downtrends, but
lots of gains can be derived in downtrends. Just have it in mind that you too,
like Tim Knight, can make money when the markets fall. Focus on that
possibility. Focus on the present and let go of the past. Yes, we can’t change
the past, but we can certainly learn from it.
A quote from Tim ends this
article:
“…I'm very dedicated to having a stop on every single
position at all times. And the whole idea of a mental stop is just anathema to
me. They must have stops the moment the trade is on…”
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
NB: If you want
to receive permanently free winning Forex trading signals, please send me an
email titled: “A Request for Free Trading Signals.”
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