Trading Fundamentals It doesn’t have to be complicated

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TRADING FUNDAMENTALS – PART 1: Accepting Constant Market Changes and Uncertainties

Most traders have a limited knowledge of trading’s fundamental rules, either from a psychological or a methodological point of view. This can lead to increasing loss probabilities on the markets, as well as deep and constant psychological damage.

Recent studies have proved that professional trading has a lot in common with professional sports activity and competition. In fact, sport coaching and training experience can be replicated and implemented to train financial traders. In any kind of sport, a series of fundamental exercises, which should be learned and practiced regularly, are necessary to reach competition level and become successful. For example, in basketball, some fundamental exercises to work on would include: rebound, left shot, right shot, dribble, pass, shot in suspension, etc.

Trading fundamentals are:

To be successful in trading, it is necessary to understand and learn these fundamental theories and, at the same time, learn a method of thought which will help implementing them in trading activity.

The knowledge and implementation of these 4 fundamentals is probably what makes the difference between successful and unsuccessful traders. Traders who make profits continuously and in the long run, have consciously or unconsciously:

1. understood their market and the effects that it could have on their mind;

2. eliminated, or learned how to cope with the negative effects of trading;

3. found a methodology – often through a thorough, long lasting research, and demanding practice – which gives them a probabilistic edge on the market. Generally, successful traders have found a method which is adapted to their personality and best capabilities (to use a marketing term: they have found their own trading niche);

4. implemented money and risk management strategies which allowed them to reach point 2 (eliminate the negative effects) and contributed to generate profits on a regular basis.

The objective of this series of articles is to explain the fundamentals of trading and how to implement a training program which will highly increase the probabilities of success, to anyone who has a passion for trading and wants to be successful at it.

In this first article, we’ll start by analyzing the market and its specific characteristics. We will see how the implementation of certain mental strategies, which usually lead us to success in our every day life, can be dangerous in the trading activity.

In any financial market, the creation of a market price occurs through the confrontation between buy and sell decisions. It is made of individual decisions (billions of them), which generate a continuous and collective decisional stream. This stream is what defines the price of a specific market instrument at a specific time. As traders, we have the possibility to continuously make multiple decisions (based on expectations) about: the market direction, the amount of invested capital, loss limit levels, the duration of a trade, etc., with the possibility to modify our decisions any time.

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These decisions aren’t only based on rational elements (as developed in the theory of Efficient Market Hypothesis or EMH) but, also on irrational and unconscious elements, which continuously invite us to change our mind, sometimes very rapidly.

Therefore the market is always moving, always changing. It has no defined structure and offers high profit and loss opportunities. In a fraction of a second markets can go from apparent quietness and stability to extreme speed and turbulence. This specific market characteristic is often ignored or underestimated by traders. But having to cope with a completely unstructured, fluid and ever changing environment is not something that we are used to. It’s like being projected into a world without laws, similar to the motion of atoms in a quantum mechanics system.

Let’s take for example, a very simple activity such as sitting down. In a world regulated by quantum mechanics rules, this simple action could become extremely complicated and risky, for anyone used to living in our “normal” world. What would happen if I sat down? Sometimes the chair would remain in the same position, both in terms of space and time. Sometimes the chair would disappear and
reappear in another place at an unexpected time. So the simple action of sitting down, could actually become very difficult if I continued to refer to my usual model of thought. So to be able to sit down in a world regulated by quantum mechanics, I’d have to learn a completely different way of thinking and acting. Otherwise, I’d be very inefficient.

As human beings, one of our main purposes is to create mental structures for ourselves which will bring us security and stability. And this is the main problem that traders have when confronting the financial markets.

We are not used to interacting
with an environment which is mainly ruled by change and uncertainty. An environment where the mental and decisional processes of all market participants are constantly changing.

Traders’ search for the Holy Grail- in other words the indicator or the theory which will systematically forecast market movements – is actually only an attempt to eliminate constant market uncertainty.

Therefore the first fundamental rule of the market is to accept changes and market uncertainties (in other words accept RISK). There is no other way to survive the financial markets than to accept this obvious rule. And it is a fundamental rule precisely because it is obvious. Easy to understand from a theoretical point of view, much more difficult to put into practice.

Accepting change and uncertainty doesn’t mean having a confused or insecure mind-set and attitude. On the contrary, understanding that fluctuations depend on mental processes and decisions, which can vary depending on an infinite number of unpredictable factors, allows us to eliminate all the mental mechanisms which generate pain (these will be developed in subsequent articles).

The absence of pain changes our perception and gives us the possibility to be objective and rational. Objective perception is fundamental in trading, as traders have to recognize market patterns. Therefore, a rational and objective mind set will help us develop a rational decision making model, which is not based on emotions. Acknowledging the fact that markets are unpredictable and accepting trading risk is – according to me – what makes the difference between a successful and unsuccessful trader.

This state of mind is an ability (or SKILL) which any trader should reach before he/she can start becoming profitable constantly and in the long run.

Trading with Elliott Waves Doesn’t Have to Be Complicated

Start simple, with the basic 5 “core” Elliott wave chart patterns

by Alexandra Lienhard
Updated: March 21, 2020

Jeffrey Kennedy, a recognized expert in Elliott wave analysis and forecasting, explains why the Wave Principle is such a reliable and powerful way to forecast the financial markets.

Jeffrey stresses that if you understand — and practice — the basics of the Wave Principle, you’ll be surprised how much it can impact your analysis and trading results.

Announcing Trader Education Week: March 20-24

Spend March 20-24 getting free trading lessons that you can apply to your trading immediately — from one of the world’s foremost market technicians, Jeffrey Kennedy. You’ll learn about Elliott waves, Fibonacci analysis, indicators and oscillators, Japanese candlesticks and more! Register now for your FREE week of trading lessons and get immediate access.

Announcing Trader Education Week: March 20-24

Spend March 20-24 getting free trading lessons that you can apply to your trading immediately — from one of the world’s foremost market technicians, Jeffrey Kennedy. You’ll learn about Elliott waves, Fibonacci analysis, indicators and oscillators, Japanese candlesticks and more! Register now for your FREE week of trading lessons and get immediate access.

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Your Content Marketing Strategy Doesn’t Have to Be Complicated

Whether it’s in the latest digital marketing trends or from the keynote at an industry event, we’re constantly being told that “content is king” and that we must “think like a publisher” if we want to stand out online today.

It’s easy to nod along, roll up the sleeves, and dive headfirst into the content marketing business. In the beginning it feels great. We’re creating! Publishing blog posts, videos, podcasts, ebooks, infographics, and more. At the end of the day there’s something that’s there now that wasn’t before as a result of our hard work. According to the latest data from the Content Marketing Institute 88% of marketers use content marketing with another 76% noting that they’re on track to produce more content this year versus last year.

But there’s a problem. Simply producing more content isn’t enough. More isn’t always better, nor is it particularly effective. While content production levels are soaring, the same data from the Content Marketing Institute also shows that only 30% of B2B marketers say their organizations are effective at content marketing, down from 38% last year. That may be because although we’re producing more content than ever, fewer marketers have a documented content marketing strategy compared with last year (32% vs. 35%), even though the same research consistently shows that those who document their strategy are more effective in nearly all areas of content marketing.

Grounding your work with a documented strategy helps you create content that’s more effective. Content strategy doesn’t have to be needlessly complex.

To help shape my content strategy, I go back to a Rudyard Kipling’s 1902 poem “The Elephant’s Child”:

I keep six honest serving-men (They taught me all I knew); Their names are What and Why and When and How and Where and Who.

We can use Kipling’s “serving men” to kickstart a content strategy too. While all of the five Ws (and one H) merit attention, focusing on why, who, and what is a solid foundation. It also helps us ensure that our content is both business centric and customer aware.

Why — As Simon Sinek says, we have to “start with why.” Your reason for doing something. When it comes to your content strategy, your why is your business objective. Why you’re doing this. This is the “business centric” part of creating good content.

Content marketing can accomplish one of six business objectives — branding, community building, public relations, market research, customer service, and lead/sales generation. Simply pick one of these objectives and use it as an anchor as you answer Kipling’s other questions.

Who — With “business centric” covered we now need to make sure that our content is also “customer aware.” Good content has to solve problems for our audience. It needs to serve a need in their lives.

Start by asking yourself who the audience is that you’re serving? With a target segment in place, really kick the tires. Have you been specific enough? Do you need to go deeper? With that nailed down, start fleshing out who they are and what’s important to them. Include quantitative demographics as well as qualitative psychographics.

What — Finally, based on your business objective (the why) and who your audience is, how can you create content that’s of service to both? What form of content works best? It’s about creating the content that’s right for your brand and that serves your customers. We need to get more prescriptive with content strategy in way that focuses on fit. Forget what everyone else is doing — what’s best for your brand?

Why, who, and what provide a simple yet solid foundation for a strategic framework you can use to arrive at the right content serving the needs of both your audience and your business.

From here, you can further flesh out your content strategy using Kipling’s other serving men — when (does this happen? How often?), where (does this take place? Internally or externally?), and how (will we get this done? How will we measure success?).

If we want more effective content marketing, we have to get smart with strategy. No one has unlimited marketing resources today. We can’t afford to do everything — and we shouldn’t anyway, as consumers are already overwhelmed by all of the content in front of them. To blindly create content that further crowds an already noisy online marketplace is irresponsible. We have to be more strategic if we want to produce better content. Even if that ultimately means producing less of it.

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