LEARN
FROM GENERALS OF THE MARKETS - PART 34
“There’s no
doubt that the RRR is tremendously important. To get big profits, you have to
take minor risks.” – Larry Williams
Emilio
Tomasini is an Italian Professor of Corporate Finance at University of Bologna,
and he’s a full time market speculator, trading several financial markets. He founded LombardReport.com, which is a
renowned online newspaper for serious investors and traders. He also serves as
a consultant to top traders. He’s a former columnist at TRADERS’. Now he
manages and directs other trading publications. He’s still a regular columnist
and an author of best-selling books. His articles are full of funny but factual
trading ideas. His website is: Emiliotomasini.com
Lessons
Professor
Emilio is best understood by visiting his website and reading his past
articles. However here are few of the numerous lessons that can be learned from
him:
1. You can have fun while
trading – real fun. Professor Emilio has an unusual sense of humor which is
often evident in his articles. Trading, as a fantastic way of life, is worth
enjoying.
2. Traders of nowadays are
lucky because they’ve sophisticated technologies and great trading facilities
at their disposal. Many decades ago, these things were not available and the
pieces of price data available then were few and far between. Trading
conditions were not as favorable as they’re today. Nevertheless, successful
traders existed in those days. If there were those who succeeded in those days
in spite of harsh conditions, why can’t you succeed with all the trading
facilities and technologies at your disposal? You now have access to real-time
data that comes to you at the speed of light. For instance, there are great
pieces of trading software out there. One of the most popular among Forex
traders is the Meta Trader.
3. Are you a systematic trader
or a discretionary trader? Systematic traders hate discretionary trading
methods while discretionary traders abhor systematic trading methods. Each camp
has certain advantages and disadvantages: both camps can be successful if they
control their risk.
4. Talking about the biggest
names in the trading world, like David Tepper, Paul Tudor Jones and others, we
know it’s inspiring and encouraging reading about them and their mindset and
trading approaches. However, it also pays if we pay attention on being the best
traders we can be. If you concentrate of being the best trader, perhaps you can
become a big name in future.
5. Making money is easy, but
retaining it is difficult. With the control of the uncertainty in your trading,
you can give up as little as possible in your profit, and as such, you’ll later
recover your profits and move on.
6. One of the major problems in
trading is that most traders don’t have enough money to invest. That’s why
we’re always under pressure to use aggressive money management so that our
small portfolios can double quickly. Do you want to make $100,000 per annum?
For a trader who has a capital of $1,000,000, that’s pretty possible because he
just have to make only 10% returns per annum. But someone whose capital is only
$5000 would need to make about 2000% before he she/he can go home with $100,000
per annum. Can you see why some find trading difficult?
7. The bigger the lot sizes you
use, the bigger your profits when there is positivity, but the bigger the
roll-downs when there is negativity. Since we’re not absolutely sure of what
the next candle would be: Some charting technique that gives some readings in a
bear market may have completely different readings in a bull market. The
greatest risk control can’t force a negative position to turn to positivity
when the market has not moved determinedly in your favor. When your lot sizes aren’t too big and you’re
conservative about your risk, you’ll eventually be paid by the markets.
Conclusion: One mentor once told me
this: ‘If it’s not painful, it can’t be gainful.” How true is this statement in
trading and in other spheres of human endeavors?
I’d
like to conclude this article with a quote from Professor Emilio:
“A good
money management can improve the results of your trading system. So you need
not have a superb trading system to make money. In the long term, it’s enough
to have a stable strategy with positive expectancy and a proper money
management.”
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders
No comments:
Post a Comment