Why 90+% of Traders Lose Money Consistently
by Bill Williams
Traders lose because they do not have an understanding of the purpose of the market and how it works. The purpose of the market is to find that place where there is an equal agreement on price and a disagreement on value. Remember the last time you bought a car ? you valued the car more than the money you paid for it while the seller valued your money more than the car. You had a disagreement about value and an agreement on price.
No markets in the world are more complicated than that. Their primary purpose is to quickly find that place where there is an agreement on price and a disagreement on value.
Knowing that we can simplify our trading approach by throwing out meaningless indicators such as "bullish/bearish" consensus and "overbought/oversold" indicators because there cannot be an overbought or oversold condition. The market's primary purpose is to make sure that that doesn't exist.
When someone says the market is oversold they are simply saying that it went lower than I thought it was going to. Here is an infallible rule concerning the market and if you will remember this, your trading will improve and you will be much less stressed trying to figure out the market:
The market is where it is because that is where it is supposed to be, and it is supposed to bethere because that is where it is.
Anything beyond that is simply propaganda, which more than likely comes from those who either don't trade or don't trade successfully. Therefore we strongly suggest that you NOT listen to CNBC-FNN, read the Wall Street journal, call your broker for advice, etc. Instead we suggest that you listen only to the market.
All the information and indicators in this software come directly from the market, and do not contain interpretation and have virtually no 'ego involvement'.
The market is really a composite of millions of traders who are trading the market ? not thinking about trading it or writing books about how to trade it, but only those who are putting in orders in the present tense. And since the market is a composite of millions of human traders, it will have some very human characteristics such as becoming moody, being aggressive, vengeful, and sometimes it just feels like taking a nap for a while.
From the viewpoint of classical science and linear logic, it has a high degree of unpredicability. The markets, like humans, will always display their intentions, sometimes with verbal behavior and more often non-verbal behavior. These non-verbal behavioral characteristics give us advanced insight into what the market has on its "mind".
The market is at least a five dimensional animal and with this software you can monitor all five dimensions. This software will also integrate these five dimensions into "non-ambiguous" signals that will allow you to devise a more profitable strategy than any software we have seen in 39 years of active trading. In fact, when properly used, this software can even program your "executive decisions" about the market.
The Science of Chaos
By Bill Williams
If you knew everything there is to know about the Science of Chaos and for some reason you wanted to label this new science with a descriptive word that would throw most people off base, it would have to be the word Chaos. Chaos (as in the Science of Chaos) does not mean what the Oxford dictionary says it does: "Formless primordial matter; utter confusion."
From this point on every time you hear the word Chaos, substitute in its stead the words "NEW INFORMATION". That is what Chaos is; it is new incoming information. Psychology tells us that any time you feel either overwhelmed and/or bored it is because you are attempting to fit new information into old categories.
Think about it, when new information comes in, our first inclination is to compare it with something we already think we understand. We say things like, "That reminds me of ?" or "Is that like?"
Because of the methodology of our educational system, we assume this is our only alternative. We actually have two different alternatives in handling incoming new information: We can:
õ Distort the new incoming information so that it will fit into our old categories such as, "This has to be a fourth wave". "This commodity is definitely overbought", or
õ We can let the new incoming information organize itself.
This is an incredibly important distinction and we strongly suggest that you study and meditate on this distinction. In fact, in our own personal view, this is probably the most important concept you could get from this software, from trading, and even from living, especially if one of your goals in life is to find out who you are.
The problem with letting the new incoming information organize itself is that you must first 'let go' without knowing what the end result will be. That is probably one of life's most difficult tasks. In fact one of the primary reasons for the development of this software is to make it possible for you to understand and make profits from letting the markets organize themselves in real time.
Our goal is to trade the market based solely on 'market generated information' and through this approach develop our personal 'intuition' through experience in using these signals. Make no mistake, this is not a 'black box system'.
Through this guided tour we will explain the function and use of each of the five dimensions of the market. We will also give you recommendations of how we trade using these signals. How you use them is solely your responsibility and if you are not trading profitably, you are either not using the individual signals properly or not integrating the signals with each other as they were designed.
The Five Levels of Trading
Trading, like most other professions, can and must be learned to take advantage of the enormously profitable opportunities that exist here every trading day. One of the largest problems new traders experience is that there is nowhere to go to really learn to trade.
Most of those touting "fail-proof" methods are purely hype, including their made up testimonials. Would you guarantee anyone millions of dollars every year and all they had to do was to buy your $ 19.95 book?
Yet there are a number of these types of books on most book store shelves. If you wanted to be a professional fighter would you schedule your first fight with Mike Tyson? Hardly, yet that is exactly the story when you enter your first order. You are in competition with the shrewdest and largest traders and institutions in the world.
One of the unique characteristics of the Profitunity approach is that it offers a way to start small and progress up to higher levels of professionalism.
Having stated this let us make it clear that to really become professional you most likely will need more than just this software. This software has already proven itself profitable to hundreds of both professional and non-professional traders [the Profitunity staff has trained over 700 individuals in their private tutorials to become successful speculators] and it should be extremely beneficial to you.
However, if your goal is to reach the maximum you are capable of, you need individual attention in an atmosphere with experienced and consistently profitable traders who will trade along with you and monitor your trading style and opportunities. If you are interested in personal instruction, contact the office of the Profitunity Trading Group.
We have divided the ladder of progression to a master trader as follows:
i) The Novice
At this level we suggest that you start with paper trading (while absolutely being aware and realizing that paper trading is not real trading and you cannot transpose the results you get paper trading into profits while really trading). At this point we are trading on a one-contract basis. At this level we are looking and examining each individual bar and comparing the present bar to the immediately preceding bar.
Our goal for you at this time is to trade the market without losing money while gaining experience.
ii) The Advanced Beginner
At this level we begin to take a panoramic view of the markets by examining a much larger number of bars and looking at the larger movements of the markets. Here we begin to examine the 'underlying structure' of the market. We begin to look at the Elliott wave and find that by going inside of the Elliott wave we can examine the deeper underlying structure, which are 'fractals'.
Fractals were largely unknown and almost completely unusable before the advent of modern studies of the Science of Chaos.
In this tour we will not take you deep into the philosophy of the Science of Chaos and Non-linear Dynamics. Rather we will concentrate on how these things appear on the bar charts of the various markets. For more details see our manual, our books, or contact our office.
At this level we also examine the momentum of the market and how the Elliott wave can be counted much more accurately on a momentum chart than on the bar chart. This software contains our own proprietary method of accurately counting the Elliott wave in real time. We also start to look at options and spreads at this level.
The goal of this level is to begin to make profits from the markets on a consistent basis.
iii) The Competent Level
This level is the beginning of professional trading. Here our goal is to maximize our Return On Investment by putting together everything we learn and use on the first three levels in such a strategy that will maximize our income on our total portfolio.
We go deeper into what moves the markets including the new dimensions of energy exchange by taking the derivative of the momentum to make obvious not only the direction of the momentum but the differences from one bar to the other as it affects the acceleration and/or deceleration of the momentum in its current direction.
This gives us a tool we call the MOM that always tells us whether or not we are in the market in the appropriate direction.
Here we engage in our last "new incoming information" (Chaos) dimension we call the zone. At this stage it resembles playing in the zone in athletics.
Michael Jordan was asked just after he had made 55 points in a record playoff game, what happened. His answer was, "I got in the zone and just couldn't get out". That's the way we want to trade at this level.
Finally, at this level we introduce the 'Alligator' whose function is to make sure that we are in the market in the right direction, that we do not waste our time by trading in markets that are going nowhere, and that we know exactly where to squeeze the maximum amount of profit from a move.
(iv) The Virtuoso Level
While this level is beyond the scope of this software, it can be reached through the proper use of this software. At this level, one not only profits from the accurate reading of the new incoming information (chaos) of the market but also becomes insightful to the point of making meaningful and original contributions to the profession of trading the markets.
This is truly in the zone illustrated by 'effortless effort' and 'knowing without knowing how you know'. One becomes one with the market and trading becomes the most insightful 'self-therapy' known today.
v) The Master Level
This is the ultimate level, which will be achieved only by a few. At this level one makes extremely significant, long lasting contributions to the understanding of the markets and human nature. They change the understanding of the market in such as way that changes the way the markets are viewed by the world.
These five levels will give you a ladder to climb and levels to aspire to while at the same time giving you a measuring tool to monitor where you are now and what progress you are making. For example, if you are not making profits on a one-contract level, you are not at Level II, etc. |
