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Thinking for a Living: The Thought Process

Sixteen years ago I had a life-changing experience. It eventually led to the creation of the now famous site TurtleTrader.com, the bestselling trading books ‘Trend Following‘ and ‘The Complete TurtleTrader‘ and the only honest film documentary to cover the decade’s economic storm, ‘Broke‘. However, it did not start that way. It started with me as a political science graduate on the outside looking in. My path led to an MBA, which provided zilch in the way of moneymaking answers. Then something changed. A chance event lead to a unique discovery. What was that? The big winners use trend following to make profits in up and down times across all markets. They don’t buy and hold. However, the vast majority of people trading money do not have this same outlook. They preach buy and hold, and are afraid to stray away from it:

  • Do winning traders all have some special talent?
  • Do they have a special inborn gene or divine gift?
  • Do they have the innate talent of a child prodigy?
  • Do they have some inside knowledge?
  • Do they have the ability to predict markets?
  • Do they always have a degree in finance or MBA?
  • Do they have huge starting capital?

There is one answer and it’s the same answer: No. The reality of big money trading is far simpler. In my communications with great traders certain truths have been revealed:

  • Innate talent is overrated. There is no magical talent that made the Turtles, for example, successful.
  • Intense practice and persistence over and over again is the reason great traders make millions, not I.Q. In fact, E.Q. is more important.
  • It is no coincidence that many top traders have their roots in the trading incubator Commodities Corporation. Richard Dennis, a subject of my second book, also proved how important coaching is to long-term success.

Successful coaching is not about motivational speeches, but rather delivering specific corrections at key times to let Aha! moments happen. However, you have to make mistakes to learn. The act of failing and fixing is when the learning magic happens. Repeating that process over and over again is when real human talent reveals itself. What stops us? We live in a world of instant gratification. We multitask. Some watch the Kardashian reality show. We sit on the Internet and our iPhone at the same time. Everything is now. Faster. Easier. There is no patience.

For great trend following traders it doesn’t work that way. Patience is a necessity. LTCM, Amaranth, Enron, the Dot Com bubble, Bear Stearns, Lehman Brothers, AIG, Fannie Mae, Washington Mutual and the Bernard Madoff swindle are great examples of what can happen when you have no plan. Frankly, the demise of these entities should cause every investor to immediately dump their mutual funds, turn off the financial news and fire their brokers. Do that and there is hope.

However, forget get-rich-quick schemes. You will have to put in the work, time and dedication. How can you to make the big money? The trading methods and behaviors of great trend following traders are in our trading systems.

That modeling has enabled us to teach their moneymaking techniques and behaviors with unparalleled results. These are trading methods that regardless of your gender, race, religion, or financial status create lasting results. The right trend trading behaviors can easily be installed into investors just like a software “installation.” You will go behind the ‘Wizard of Oz’ curtain to learn directly from the trend following winners. Yet, how do you prevent failure before you begin?

Everyone learns differently and our individual support allows you to connect with our support team at your trading level. All successful entrepreneurs, traders, executives, and athletes have coaches and mentors. No trading method is beyond the comprehension of the average investor or trader, but the right coaching is pivotal. If you have a deep desire to make money and the ability to follow a proven, step-by-step system, you have a chance. So what is a trend following system?

A system is simply an idea. It’s a trading idea for making buy and sell decisions in any market. A trader takes an idea, turns it into a mathematical formula and trades it to make money. A good trading system doesn’t buy low or sell high; it rides trends. Great trend followers’ success comes from the discipline to follow their rules no matter what. Our trend following trading systems answer the 5 critical questions:

  • What market do you buy or sell at any time?
  • How much of a market do you buy or sell at any time?
  • When do you buy or sell a market?
  • When do you get out of a losing position?
  • When do you get out of a winning position?

How much money can be made as a trend follower? What are performance number examples over the decades? The returns are huge. However, to make the big money you need a plan for all contingencies in all types of markets. When the unimaginable occurs, when the randomness and uncertainty of life kicks in (like our all too frequent market crashes), systematic trend traders remain calm. They know when to buy, sell, or adjust their positions — before the chaos ever hits. You can apply our proprietary trend following rules in markets around the world, from currencies to gold to silver to oil to stocks. How can one trading system trade all markets? People think that you need to know everything about a stock. You must guess what Apple is really doing. You must know crop report details. You must know gold mining. You must know about OPEC. All false. Consider this excerpt from my book “The Complete TurtleTrader”:

“Tom Willis had learned long ago from Dennis why price, the philosophical underpinning of Donchian’s rule, was the only true metric to trust. He said, “Everything known is reflected in the price. I could never hope to compete with Cargill [today the world's largest private corporation, with $107 billion in revenues for 2010], who has soybean agents scouring the globe knowing everything there is to know about soybeans and funneling the information up to their trading headquarters.” Willis added [when talking about trend followers], “They don’t know anything about bonds. They don’t know anything about the currencies. I don’t either, but I’ve made a lot of money trading them. They’re just numbers. Corn is a little different than bonds, but not different enough that I’d have to trade them differently. Some of these guys I read about have a different system for each [market]. That’s absurd. We’re trading mob psychology. We’re not trading corn, soybeans, or S&P’s. We’re trading numbers.”

You don’t learn fundamentals, predictions or value investing. Warren Buffett? Give us a break. If there was no government bailout, Buffett was out of business. At the end of the day there are no secrets or insider information needed to make the big money. There is only priceless information you don’t yet have:

  • You learn how to trade for out-sized absolute returns on all markets.
  • You learn how to be ready for markets to go up, down or sideways.
  • No ‘educated guesses’ about what to do or chart reading.
  • Think probabilities, not hunches.
  • Fundamental factors are irrelevant.
  • Many of the things you might think matter most matter least.
  • You will go broke trying to trade with your ‘gut’.
  • Winners know how much they can lose at all times.
  • Losers mistakenly dream about how much they can win.

You don’t have to risk trading capital until you are 100% comfortable. You can back test or paper trade for as long as you need before investing real money. Our training includes everything you need to get up and going as a systematic trend following trader. You will learn:

  • Proprietary and proven winning systems with clear examples.
  • How to enter either on the long or short side at the right time.
  • Where to place your stops to exit with a profit or a loss.
  • How to use today’s trading action for your next day signals.
  • Learn trend following systems that trade all markets the same. No jargon, no secrets, no technical language. Just clear and comprehensive explanations of exactly what you need.
  • Read our FAQs.

San Diego, Jakarta, Singapore, London, South Africa, etc. — the internet allows students globally to learn and you will be learning from a firm that has been on the ‘inside’ for over a decade. That access is unobtainable elsewhere. If you want to know how great trend following traders make their decisions, what rules they use for buying and selling, how they control risk and use it to make millions, you can turn here. Our firm has assembled the most profitable, unique and proprietary trading systems available. All extracted from the winners.

A trend following trading education is far less expensive than losing a fortune without a plan. How much does our trading education cost? Consider it an investment in your future wealth. Bottom line, at the end of the day it comes down to one issue: making money. You can exponentially increase your returns. Listen to our students.

Consider one last motivational trend following story.

Back in the mid-nineties I met Mark Rosenberg in his office in Stamford, CT. Rosenberg was/is a trend following trader. When I first met him he shared a great trading/entrepreneurial ‘way’ that always stuck with me. Sitting in his private office, and I still remember the book Future Shock prominently displayed, Rosenberg talked about the ups and downs of trading along with the mental outlook needed to excel. He told me that when the down times came, those losing money times, he would always come home and tell his wife that it was back to ‘franks and beans’. Meaning, he adjusted. He was pragmatic. He always cut back until trends came back. Recently, after not thinking about that experience for many years, I caught a line from him describing trend following pioneer, and Red Sox owner, John W. Henry:

“In 1980, Henry told me, ‘I’m going buy the St. Louis Cardinals.’ I told him, ‘You don’t have any money,’ but he always believed he would.”

Henry did not end up with the Cardinals, but the Boston Red Sox were a nice consolation prize.

Thinking for a Living: Game Over, Game On

Noted author Seth Godin writes:

“The realization is now. New polling shows that Americans are frustrated with the world and pessimistic about the future. They’re losing patience with the economy, with their prospects, with their leaders (of both parties). What’s actually happening is this: we’re realizing that the industrial revolution is fading. The 80-year long run that brought ever-increasing productivity (and along with it, well-paying jobs for an ever-expanding middle class) is ending. It’s one thing to read about the changes the internet brought, it’s another to experience them. People who thought they had a valuable skill or degree have discovered that being an anonymous middleman doesn’t guarantee job security. Individuals who were trained to comply and follow instructions have discovered that the deal is over…and it isn’t their fault, because they’ve always done what they were told. This isn’t fair of course. It’s not fair to train for years, to pay your dues, to invest in a house or a career and then suddenly see it fade. For a while, politicians and organizations promised that things would get back to normal. Those promises aren’t enough though, and it’s clear to many that this might be the new normal. In fact, it is the new normal. I regularly hear from people who say, ‘enough with this conceptual stuff, tell me how to get my factory moving, my day job replaced, my consistent paycheck restored…’ There’s an idea that somehow, if we just do things with more effort or skill, we can go back to the Brady Bunch and mass markets and mediocre products that pay off for years. It’s not an idea though, it’s a myth. Some people insist that if we focus on ‘business fundamentals’ and get ‘back to basics,’ all will return. Not so. The promise that you can get paid really well to do precisely what your boss instructs you to do is now a dream, no longer a reality. It takes a long time for a generation to come around to significant revolutionary change. The newspaper business, the steel business, law firms, the car business, the record business, even computers…one by one, our industries are being turned upside down, and so quickly that it requires us to change faster than we’d like. It’s unpleasant, it’s not fair, but it’s all we’ve got. The sooner we realize that the world has changed, the sooner we can accept it and make something of what we’ve got. Whining isn’t a scalable solution.”

You don’t apply that thinking to your investing? Why not. Are you a masochist?

Thinking for a Living: Your University Blows

Original Facebook investor Peter Thiel writes about the need to rethink formal education:

“Were in a bubble and it’s Not the Internet. It’s higher education. A true bubble is when something is overvalued and intensely believed. Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus. Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated. Similarly, the idea that attending Harvard is all about learning? Yeah. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life. It can lead to an unhealthy sense of entitlement. It’s what you’ve been told all your life, and its how schools rationalize a quarter of a million dollars in debt. It used to be a given that a college education was always worth the investment — even if you had to take out student loans to get one. But over the last year, as unemployment hovers around double digits, the cost of universities soars and kids graduate and move back home with their parents, the once-heretical question of whether education is worth the exorbitant price has started to be re-examined even by the most hard-core members of American intelligensia.”

You can’t find one university offering one class on trend following. That alone speaks volumes.

Thinking for a Living: Your Motivation

The very bright trailblazers who molded our thinking can be seen across these pearls of wisdoms:

  • Bring joyful, imaginative, and impassioned energy every day. Don’t fake it.
  • You don’t need to be big to be good, you need to be smart.
  • When there is no one there, insert yourself. Take over.
  • Engage the world as if your life depends on it.
  • Nothing is more important than transforming someone.
  • Have a vision grounded in your uniqueness.
  • The race winner is often curious and slightly mad.
  • Dry obligation in life will figuratively kill you.
  • No one will give you permission. Seize the mantle.
  • If you can’t solve a problem, you are playing by the collective’s rules.
  • Hard work, sustained concentration, and drive are the so-called secrets.
  • Winners understand sunk costs and opportunity costs.
  • Plan to win, prepare to win, and have every right to expect to win.
  • It’s in your power to change your belief systems. No one is stuck. Be unstuck.

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