Update on PFG, et al

The big update with PFG Best, the broker that stole my money (and thousands of other's money too) is that there is no new information.  The lack of communication is pathetic!  I'm still guessing I will eventually see about 40 cents on the dollar, but when? is the big question.  I wish I had even a clue on that!

Regarding the blog, I haven't posted as much, and I miss your questions and comments.  So, I am going to have a free webinar later this week, where you can ask any question you want!!

Ask any trading question you wish, and I will try to answer. We will spend 15 minutes on each of these topics: 1) Building Your Own Trading System, 2) Buying a Trading System, 3) Trading Psychology, and 4) Anything Else. 60 Minutes webinar

https://attendee.gotowebinar.com/register/319776808796368128

FREE Webinar Today - A Few Spots Left

Who hasn't been burned by hypothetical results?  Not me, that's for sure!


Learn how you can avoid 8 different hypothetical trading traps, at my FREE 60 minute webinar. TODAY!

You can register for "Hypothetically Speaking" on Aug 22, 2012 4:00 PM EDT at:

https://attendee.gotowebinar.com/register/4644352853018460160


After registering, you will receive a confirmation email containing information about joining the webinar.

I hope to see you there!

Trading - Acres Of Diamonds

I am sure you have probably heard the famous story "Acres of Diamonds."

It is a story of a farmer who hears about other farmers in his area getting rich off diamonds found on their property.  Exciting by the thought of being rich, and not having to farm, the farmer sells his land, buy prospecting tools and sets off to find his riches.

Years later, of course, he dies, broken and penniless, never finding any diamonds.

The land he used to own - the land he sold to fund his diamond search - turned out to hold the richest diamond mine in the world.  He owned, free and clear, acres of diamonds, and yet he never looked on his own land.


Think about this story when you reflect on your trading.  Maybe you bought a trading system you barely studied (and later put it on a shelf), or a trading book that you never read.  Or maybe you had a great idea for a trading strategy, but never bothered to test it or pursue it.  Maybe you have a system you trade, but you don't trade it with the proper number of contracts, thereby limiting its potential.

Most people trading are in an endless pursuit of the trading equivalent of "acres of diamonds." You never know, you might already have that diamond mine in your possession...

Trading Process - Step 15

The Trading Process - Review and Monitor - Step 15

However you trade, make sure you review your performance regularly.  Some people do this every day, some every month.  The point, though, is to know where you stand, and once you determine something is seriously statistically wrong, make changes.  Don't wait until your account is empty before you take action, but also don't make changes after the first losing trade.

Have a scheduled "business review" and you'll be better prepared than 90% of traders out there.


Next: That completes the series on "The Trading Process"

Hypothetically Speaking...

Have you ever wondered about some of the secrets that make hypothetical results look so good?

Hypothetical trading results can be deceiving, to say the least. Learn at least 8 ways you can be fooled by hypothetical results, and concrete ways to avoid them. - 60 minute webinar.

I will be presenting at this FREE webinar. Please register for "Hypothetically Speaking" on Aug 22, 2012 4:00 PM EDT at:

https://attendee.gotowebinar.com/register/4644352853018460160


After registering, you will receive a confirmation email containing information about joining the webinar.

Execute Flawlessly

The Trading Process - Execute Flawlessly - Step 14

As traders, we all make mistakes.  We buy instead of sell.  We forget to turn automation on or off.  We don't have backup internet or computer access.  We forget about positions in our account.

The point is that mistakes are part of the business.

One way to get "incentive" to correcting mistakes is to record them, and record the amount of dollars involved. You can easily do this with a spreadsheet.  Just compare your actual fills to your "perfect" fills - the fills you should have obtained if you had executed flawlessly.

You can also use this spreadsheet to account for slippage in stop and market orders.  Many unscrupulous people out there show results without slippage - they obviously aren't trading!

I recently looked at my actual fills versus what Tradestation performance reports said.  I had assumed $35 for commissions and slippage per trade.  When I analyzed my real money results - which include some late trades, mistakes and of course normal bid/ask slippage - I found that my actual commissions and slippage was about $30 per round trip trade.  So, I am doing better than I had expected, and that is great to know.

Sometimes mistakes will work in your favor, and sometimes (most times) they will cost you money.

The key though, is that you can only correct what you know about.  Keeping a record of mistakes is the first step on the road to getting rid of them.

Next: Review and Monitor

Free Webinar

I am putting on a free webinar tomorrow.  I'll walk you through the steps I took to develop a Gold and Euro Trading System...

Please register for All That Glitters Is Gold on Aug 2, 2012 8:30 PM EDT at: 

https://attendee.gotowebinar.com/register/5758688096394819584

Learn how trading Gold and the Euro Currency using Kevin's Trender system can be a great way to expand your trading portfolio. Basic rules for Trender Gold system will be revealed - 60 minute webinar. 

After registering, you will receive a confirmation email containing information about joining the webinar.

Overleverage

The Trading Process - Don't Overleverage - Step 13

Probably the biggest mistake I see traders make is with overleveraging.  Basically, their "bet" size is too big for their account.

I realize that many small traders almost have to overleverage (or else not participate at all), but some people mistakenly think if they have a $10,000 account, and day margin is $500, they should trade 20 contracts!

As a trader, your first goal is really just to stay in the game, until you have a proven method.  Until you reach that point, staying small is the way to go.

With any new system I trade, I almost always start with 1 contract.  As profits accumulate, so do the number of contracts I trade.  But, it is a slow process.

So, how do you know if you are overleveraged?  Here are a couple of guidelines:

1.  Risk only 1-2% of your account on any trade.  So, if you have $10,000 account, your max loss should only be $100.  Due to market noise, $100 is very, very small, and maybe you should wait to trade when you have more risk capital.

2.  Your account size should be 2-3 times the initial overnight margin requirement, AT A MINIMUM.  So, for example, Euro currency initial margin is currently $4,050.  If you have $10,000 - $15,0000 account, and trade 1 contract, you MIGHT be OK.

3.  If you go to my website (www.kjtradingsystems.com) and sign up for my e-mail list, I'll send you a link to a Monte Carlo spreadsheet.  Simply enter your trade results and your account value, and you'll see what your risk of ruin and median drawdown over 1 year of trades is likely to be.  If you find your risk of ruin is say 75%, you are overleveraged!

Just remember, it is better at first to trade very small.


Next: Execute Flawlessly