If Tiger Woods still needs a coach for his game. Why not you in the game of trading?

Almost all the greatest investors or traders have either a mentor or coach to help them in their early days of investment. Warren Buffet has Benjamin Grahman to guide him. George Soros has his father to  teach him the meaning of survival when he was still a teenager. And even TigerWoods still has a coach to provide him with feedbacks on his techniques even though he is already considered one of the greatest golfer in the world.

I believed that is especially important when you are just starting to learn how to trade and a good coach/mentor will be able to provide you with valuable feedbacks on your trading techniques and your psychology. Perhaps some of you might think by reading some books on trading or discussing in forums will be good enough. But an experienced trader will be able to pinpoint your mistakes and shorten your learning curve.

The next question which may come into your mind is :” how do I find the right coach to help me?”. There are tens and hundreds of courses available out there in the market where people are willing to teach you for a fee. Here are some suggestions which you can consider in choosing the right person.

• Is his/her style of trading the type I am looking for? (Intraday or Swing Trading)
• Is he/she only boasting about how much their strategy or system is generating profits but skipping through the drawbacks and psychology of trading itself?
• Does he/she sound sincere in helping you achieve your goals?
• Will there be any support session after the course and possible repeat course with no extra charge or lesser fees? ( Your journey only starts after the course and not during it)
• Only forums providing positive comments on this particular trainer?

These are just some of the advice that you need to consider when going for courses. Think of them as your investment criteria. If you can spend a substantial amount of time in looking for your dream car, house or even spouse. It’s the same as looking for the right type of trading course that fits you.

Leverage. The 2nd most powerful force in the universe.

Albert Einstein once dubbed compound interest as the most powerful force in the universe. In my opinion, leverage will then have to be second to it. Leverage can be understood in 2 areas.

1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.

2. The amount of debt used to finance a firm’s assets. A firm with significantly more debt than equity is considered to be highly leveraged.

What I am trying to say here is that you can reached your financial goals much faster if you combine the 2 most powerful forces, which is compound interest and leverage. Warren Buffet gain his massive wealth not only using compound interest  but also using leverage by setting up a funds and using ‘free float’ from his Berkshire Hathaway. So does George Soros when he used leverage to short the  British pound to became ‘The man who broke the bank of England”. Many of the wealthy people that we knew all use some sort of leverage to hasten their wealth creation.

Now the drawback on leverage is that it can magnify your loss as just as much as your gains. Its like a double edged sword and it could hurt you if you don’t know how to use it. One of the way to use leverage correctly is a deep understanding of the market your investing. For example. If you are using leverage for property purchase, you gotta understand the various locations, market price, trends, demand and supply, interest rates, etc. Another way is the proper money management on your investment trades.

Leverage can hasten our road to financial freedom and also to destruction if it is not properly understood and executed. Seek to understood and respect its power and it shall reward you tremendously.

Defining Your Own Trading Plan and Philosophy

In my opinion. The first step to become a successful trader is to create your own trading plan and philosophy. That includes being the type of trader you are, the market you are targeting and the philosophy of your trading plan.   and then, a so-called ‘guru’ will write a book or start a seminar saying that his trading plan will help you profit from the market. But bear in mind that it is His trading plan and not yours. His mindset and values will most likely differ from yours and even if it works for you. It may not last for long particularly if you do not have the necessary knowledge to adjust your game plan when the market changes which it always do.

My trading philosophy is similar to a person who wants to learn to play basketball. Imagine what will you do if you want to learn a new sports like skiing or diving? You will first read up some books or attend some courses to learn more about the sports before getting hands-on. In the aspects of basketball, you will have to learn the basics like passing and dribbling.

But mastering the basics doesn’t guaranteed success unless you play a pick up game with someone else. This is the part whereby most people failed and couldn’t pick themselves up in the game of trading because they lost too much and recovering will took forever. The best players in the game will learn to survive every game.

Survival is the key word, and that is my trading philosophy. Take a scenario of two athletics with same experience and attributes going through the NBA season of 82 games. Athletic A gets injured a couple of times and sat out for 20 games whereas Athletic B only sat out for only 2 games due to minor sprain. At the end of the season, Athletic B gets higher payout and becomes more experience because of  the 80 games he played.

Being a basketball fanatic, I intend to define my trading philosophy with the same values I had towards the game basketball. Which is to survive every game and gained the lesson learnt from it and move on the next.