Surprise!

I have another Success Factor for you that the best investors in the world follow:

• Success Factor #6: Only Trade “Deliberately-Trading” Markets

Before I show you what this means, look at what one of my long-time students, Dr. Bruce R., had to say about this concept:

Here’s why Bruce took the time to send me that note.

Take a look at the chart below:

See how that market jumps all over the place, helter-skelter, like an electrocardiogram?

That’s what I call a NON-deliberately-trading market.

In other words, it lurches around with no rhyme or reason.

If you try to trade a market like that, you’d have better odds dumping your money into the nearest slot machine.

On the other hand, look at THIS chart:

See the difference?

Now THIS is a deliberately-trading market. It moves up and down in a smooth, predictable manner.

When you trade a market like this, you further increase your odds of success.

Too many people “force a trade” without considering the kind of market they’re about to invest in.

But there’s just NO REASON to trade a NON-deliberately-trading market when there are SO MANY deliberately-trading markets.

And as you can see, it doesn’t take any kind of special training to spot these. Go ahead and look at a dozen charts from different companies and see how many are deliberately-trading.

You’ll be able to “eyeball” these kinds of markets in SECONDS.

So, before you place another trade, and before you invest another dollar in any market, make sure it’s deliberately-trading. Your wallet will thank you 🙂

To Your Success,
Bill Poulos

p.s. Keep an eye on your email “inbox” for some “hands-on” video training for me.

One of my favorite teaching techniques is to record my computer screen so you can see what I’m seeing as I teach you how to trade the markets. It’s almost like sitting right next to me.

More soon!

 

I hope you’ve been learning something from my Success Factor emails I’ve been sending you over the past week or so.

We conclude today with the last one.

• Success Factor #5: Use Multiple Trading Methods

As you probably know, the markets are very dynamic and things can change in an instant. Also, certain types of market behavior require different approaches to going after profit potential.

Take a look at the chart below for an example:

This is a representative chart that could be any stock to illustrate the different kinds of market movements that can take place.

(Heads up — I’m about to throw some technical trading terms at you, but don’t get rattled if they sound foreign to you. Part of taking control of your money includes learning the lingo that successful traders use, but thankfully, you can master all these terms in just a day or two. It’s SUPER easy.)

• OK, the goal of Method A is to “sell short” in a weak market after that market has “rallied” up to key “resistance levels” in a downtrend.

  By the way, if you’ve been taught that “selling short” is risky (or making money when the market goes down), then you don’t have all the facts. The reality is that ALL trading and investing is risky, and what’s even RISKIER is when you “go long” when you should’ve “gone short”.

  Plus, experienced traders will tell you that you can often make more money more quickly by selling short because the markets tend to drop more quickly than they go up.

• Next, the goal of Method B is to capture a “reversal move” after an extended uptrend when most traders expect that trend to continue, not realizing that it’s ended and the big money opportunity is in the reverse direction.
• Method C’s goal is to buy on “weakness” into “support” in an uptrend.
• And the goal of Method D is to buy on “confirming strength” after the market has formed a “flag or pennant formation” in a strong uptrend.

You still with me? 🙂

Again, DON’T WORRY if you feel a little lost right now. That’s natural if this is new to you.

All you need to understand right now is that in any given market, there are going to be different ways to go after profit potential, and that’s why you need MULTIPLE METHODS.

Imagine if you were just using Method A on the example chart above — you would’ve missed out on 3 other big market moves.

But that’s what most people do — they think there’s only one way to invest… and that’s one of the reasons they get stuck sitting on the sidelines watching OTHERS reap the rewards.

So what does all this have to do with golf?

Well, what do golfers have in their bag? Multiple clubs and multiple irons, right?

Golfers understand that a golf course has multiple conditions, and they choose the right iron for the right condition.

Just as Tiger Woods wouldn’t use only a putter to play an entire round of golf, the best investors don’t use just one method to going after profit potential in the markets.

Make sense?

Good!

And by the way, there are WAY MORE than just 4 ways to trade the markets. I just chose 4 for this example. The bottom line is — the more methods you have in your “trading toolkit”, the more chances you have to extract money from the markets.

Well, I really hope you’ve enjoyed these 5 Success Factors. They are the core principles behind just about every successful trader.

Very soon, I’m going to be sending you some more training, including some video examples of how to go after as much profit potential in the markets as possible.

To Your Success,
Bill Poulos

 

All right…

So you already know that buy & hold is dead, short-term trading is the way to go, and you want to adopt a “casino mentality”.

But my fourth Success Factor is easily the most important of them all (and also the “weirdest”):

• Success Factor #4: Manage Risk First, Then Go For Profit

Say what?

Most people are thinking about only ONE thing when they place a trade (or when they put money into ANY kind of investment, for that matter).

They’re thinking about how much money they stand to make.

But if that’s the first thing you consider, then chances are you’ll end up a big LOSER.

What do I mean?

Successful investors and traders think about how to MANAGE RISK first, way before they get excited about any potential profit they might enjoy.

In a nutshell, here’s the approach they take when buying a stock (you should do this, too):

1. Have a list of “setup condition” criteria that must be met before you place your trade. This is the first step in dramatically putting the odds in your favor.

   For example, the 50 day moving average is going up and the 20 day moving average is greater than the 50 day moving average.

   (Don’t worry if that sounds like “Greek” to you — in some of my future training videos, I’ll explain all this technical gobbledygook so that even an 8th grader can understand it.)

2. Have a pre-defined “entry point” price at which you enter a trade. Again, you’re improving the odds of success even further by doing this.

   For example, place a “limit order” to buy at the 20 day moving average.

3. Immediately place an “initial stop” exit order. This is a price BELOW the price you just paid.

   For example, if you bought a stock at $100, you might place your initial stop at $95. That way, you know the most you can lose is only $5/share, or 5%.

   How comforting would it be to control EXACTLY the maximum amount of money you could lose every time you make an investment? That’s how the pro’s do it.

4. Have an “exit strategy” to make money on your trade as quickly as possible.

   For example, you could set a “profit target” order that automatically sells after you make 10%.

   Or, you could use a series “trailing stops” that further reduce the amount of money you’re willing to lose. If the trade moves in your favor, at some point you’ll even be able to ERASE ALL THE RISK so that you CAN’T LOSE, no matter what happens.

   By the way, this is a goal I teach all my students to pursue every time they place a trade — to erase all the risk as soon as possible.

Can you imagine what your portfolio would look like today had you known about these steps before the last market crash? You could’ve potentially avoided the account-crippling losses too many “buy & holders” suffered.

Whew!

That might be a lot to take in, especially if those concepts are new to you, but they’re really actually quite easy to learn.

They also become second nature once you practice them a few times.

OK… so the final Success Factor has to do with golf, and even if you’ve never golfed, you’ll see why golfers already have the mindset required to be a GREAT investor.

To Your Success,
Bill Poulos

 

Caesar’s Palace, that is…

Or be like the Luxor, Bally’s, the Flamingo, MGM Grand…

…in other words:

• Success Factor #3: Be Like A Casino

Yes, you read that right.

The casino model is just a great example of what you want to accomplish as a trader. You want to be the casino.
What does that mean?

You want the odds in your favor. You want to be around tomorrow, next week, next month, a year from now, and more.

Do you the casino worries about paying out a jackpot or two or three? Absolutely not.

In fact, they love it because it attracts more gamblers. They don’t mind paying out the jackpot because they know the odds are in their favor. They know they have the edge. They know the more people gamble, the more the casino is going to come out ahead.

YOU want to be in that position.

The casino controls their losses. They have house limits that have been calculated very carefully ahead of time so that the odds are heavily in their favor.

They’re NOT going to lose, so that’s where you want to be. That means that you have to understand that in order to be a winner, there are going to be losses from time to time. That’s OK, just like the casino pays out jackpots.

You’re not paying out a jackpot, though. You’re limiting those losses, but you get the idea.

Of course, the goal is to stay in the game. Understand that individual trade outcomes are not important — it’s the series of trades that give you the edge…

Does that make sense?

The SERIES OF TRADES.

This is what most “buy & holders” do who attempt to trade short-term trends:

Using no proven method whatsoever, they blindly buy a stock and cross their fingers.

They might have a 50/50 chance of winning, so half the time they lose, get frustrated, and make the assumption that short-term trading doesn’t work.

And half the time they win, then try another trade and lose and become frustrated and give up.

The point is that their approach is random and they usually have no method or system.

So when I say you want to be the casino, you MUST have a proven method or system that you follow which gives you the “house advantage”, just like the casino has a proven system for success.

And it all starts with Success Factor #4, which I explain in my next email.

But I have to warn you — this next Success Factor is counter-intuitive, but I believe it’s the MOST IMPORTANT aspect of trading.

And if you can get it right, your odds of success can SKYROCKET, almost overnight.

To Your Success,
Bill Poulos

 

In my last email, I revealed Success Factor #2 is to realize that “buy & hold” investing is dead.

So what’s the alternative?

• Success Factor #2: Trade Short-Term Trends

The reason “buy & hold” fails is because it counts on long-term trends (VERY long-term trends).

But short-term trends, or “mini trends”, occur again and again in many different markets, and they present a TON of profit potential IF you know what you’re looking for.

Let me show you exactly what I mean and revisit the 9-month chart of the S&P500 we looked at in my last email.

To the “buy & hold” investor, that 9-month period was a wash…

-but to the NIMBLE investor (or the short-term trader), here’s what they see:

WOW!

Look at all those little blue boxes – they’re pointing at all the short-term “mini trends”.

When added up, all those trends amount to 47.6% of profit potential.

That’s HUGE.

Now, that doesn’t mean that you can magically capture all that. After all, buying at the bottom and selling at the top of a trend can only be done by liars 🙂

But it DOES mean that there WAS 47.6% of POTENTIAL to go after, and that’s big, big, big.

Also, I’m NOT talking about day trading here (although you can do that, too). I’m talking about END-OF-DAY trading. Just managing your trades AFTER the market closes.

Many “old school” investors think that “day trading” is the only kind of short-term trading, and they’re just flat-out WRONG.

In fact, unless you can handle a LOT of stress, I think day trading is too risky for most people.

That’s why my favorite way to go after “mini trends” is to simply monitor trades ONCE PER DAY at the most. It only takes about 20 minutes (or less), and I think it’s the perfect way to trade.

By trading after the market closes, you can still hold down a job, pursue a hobby, spend time with your family, travel, whatever. It’s low-stress and low-maintenance, yet it’s filled with more potential than most “buy & holders” could ever dream of.

I have some training videos I want to share with you later on that reveal some of my favorite ways to trade like this.

And don’t worry – you don’t need to be a technical genius to use them. I design all my trading methods so that almost anybody can have a crack at lasting success in the markets by using them.

I think that’s why so many of my students keep coming back to me to further their financial education.

Now, if you’re a “numbers” person then you’ll like my next email, where I’ll reveal Success Factor #3.

(It has everything to do with GAMBLING, but in a good way. You’ll see…)

To Your Success,
Bill Poulos

Did you get my message the other day about the 5 Success Factors I discovered over the past 4 decades that the Top 5% of all investors have in common?

I’ll be sharing them with you over the next several days.

(If you didn’t already hit REPLY to let me know you got it, can you do that real quick right now? Just hit reply and say, “got it” – thanks.)

OK here we go!

The first Success Factor is this:

• Success Factor #1: Realize That “Buy & Hold” Investing Is DEAD

Years ago, it was the accepted belief that you could buy a portfolio of diversified stocks over your career, retire, and then cash in on the gains those stocks made over your lifetime.

That sounds nice in theory, and it even worked for awhile, but “buy & hold” only works over the long haul if the price of the stocks you choose continues to go up, up, up over time.

Well, you don’t need to be a financial genius to know that that doesn’t happen any more.

Let’s take a look at a chart of the S&P500 over an 11 year period.

You can clearly see that the “buy & hold” potential was 0% over that time, and that’s only if you had the guts to hang on to all your positions during the huge market crashes in 2001-2002 and 2008.

Many investors dumped their stocks and took a huge loss.

But 11 years is a long time, so let’s zoom in a look at just a 9-month period.

Again, you see that the “buy & hold” potential was 0%.

You’ve probably heard one of my favorite definitions of INSANITY before: doing the same thing over and over again but expecting different results.

Well, “buy & hold” investing is definitely INSANE.

So, at a bare minimum, I urge you to stop trying to get ahead in the markets if you still think this is a viable approach, because it’s NOT.

And don’t look to your broker for help, either. You know why they’re called brokers, right? ‘Cause they’re BROKER than you!

All kidding aside (not really), there’s a MUCH BETTER WAY and a much SAFER WAY to invest.

It’s Success Factor #2, and I’m going to cover it in my next email.

To Your Success,
Bill Poulos