The Best Trader in the World

The Best Trader in the World

“Life itself is a risky enterprise. Sometimes we fly high, enjoying great success. But then suddenly we fall into deep disappointments and the haunting reality of a failure, leaving our hearts wondering if there is anything worth looking forward to.” – Joe Stowell

There are super traders all around the world. If you don’t know them, I know some of them. They earn their livelihood by trading and they’re financially free. Now the question is: Who’s the best trader in the world? Indeed, the best trader exists. Now, I won’t mention names, but I’ll tell you how the best trader trades.

The best trader doesn’t argue with the markets – he always admits his mistakes. Most people tend to feel they’re right, even if facts prove them wrong. Extremely terrible speculators don’t accept their errors. It’s really a psychological condition that makes a person refuse to think he’s made a mistake, even if reality shows otherwise. Being overconfident in riding a position that’s determinedly negative is definitely not a good thing. Top traders always acknowledge their mistakes.

Likewise, the best trader may use any kind of positive expectancy system including fundamental strategies and anticipate that the market will move in a certain direction. If the price movement or fundamental figures happen to be against his expectation, he’ll smooth all his positions immediately. No arguments, no hope. Financial markets have no mercy upon anybody. If things go against you, then get out of the market without wasting time. Every good speculator I’ve studied is really good at cutting positions that seem to go determinedly against them. Yet, whenever the market proves them right, they run their gains for a considerable amount of time.

The greatest trader accepts the uncertainty that can affect any open orders; they even do this before they open the orders. Uncertainty remains our ally, since speculation is a game in its own right. Negativity is also included in the game. The best trader doesn’t feel sad when a trade goes negative, nor does he feel too happy when a trade goes positive.
Using a System Profitably is Conditional
Are you a successful trader? Did you like the results you produced as a trader in the previous year? If not, what errors did you make and how can you improve your results henceforth? You may need a trading system that takes care of some cogent factors contributing to profitable trading. Do you have these factors in mind? Please consider some of them:

1. Do I have a rule to follow in my speculative activities? A trading strategy should be approached with the level of seriousness and enthusiasm with which one would approach any high level endeavor or business. The entry, exit, position sizing and other rules of this strategy must be followed to the letter.

2. Do I have a worst-case emergency plan? A good system should have a rule (or rules) that can deal with any adverse movements that can affect an open trade, as well as a rule that makes you exit quickly if things are no longer going in your favour.

3. Do I have a positive expectancy system that can enable me to survive the current type of market? A good system ought to make money in good market conditions and make as little drawdowns as possible in bad markets conditions. It should have positive expectancy incorporated into it, which means that at least, two dollars should be expected for each dollar that is being risked. In other word, you should be profitable on a long-term basis even with only 30% accuracy.

4. Do I have a technique that will continue working even if the market conditions change without warning? Yes, a good trading system ought to survive all market conditions. A good trading system can work well in bull or bear markets. But maybe you should stay out of extremely consolidating markets! You just need to stick to its rules.

5. Do I even recognize the current type of market? It helps to be aware of the type of the market one is trading and the current prevailing condition of the market. This can help you make informed trading decisions.

6. Do I constantly condition my mindset in a way that makes me execute my trades flawlessly? You need to work on yourself. There are traders who use position sizing that is far bigger than the one recommended. Some enter additional trades based on analysis that is completely different from the rules of the system. Some do not even use stops at all – contrary to the system rule! A trader using a good system should learn how to control herself/himself and do the right things in the markets rather than doing things that would satisfy human emotions.

If you answered no to any of those questions, you have clues about why your results in the past have been undesirable. These, by the way, are only a few of the questions you could ask yourself. If you could take the factors above into consideration and work on them successfully, then you may find that trading can indeed be profitable.

Conclusion
When the markets go in our favour, we feel like a champion. We assume that we are a super trader and that we’re smarter than other traders. In most cases, only traders who have experienced the good and the ugly sides of the markets and survived them all are those who are really qualified to be our mentors. You need to forget about your past and look forward to a brighter future. It’s important that you overlook your past failures and press forward.

This chapter concludes with the quotes below:

“Stephen Covey says – ‘Live out of your imagination, not your history’. Look forward, not in your rear view mirror – or you’re sure to crash. It’s not what happens to you, it’s how you handle it that counts. Your mistakes are completely separate from who you are as a person. Take pride that you’re moving one step closer towards your goals. Don’t cripple your future growth by shooting yourself in the foot because you made a screw up.” – Louise Bedford

“One of the main issues that new traders have is that they have expectations of huge rewards in a short period of time. ‘I’ll take my $5,000 trading account and turn it into a million dollars in a year, and tell my boss where he can go!’ That rate of return is a bit unrealistic. By increasing your account size just a couple of percentage points a month, the power of compound interest will make you wealthy, but over a long period of time. Trading as a career is a marathon, not sprint. Those who try to make too much too fast often over-leverage their account and take on unnecessary risks by doing so. One or two large losses can wipe out a few weeks or months of good gains! If you do that you have ‘worked for free’ as your account takes these major drawdowns. Does anyone want to work for free? I know I don’t.” – Rick Wright (Online Trading Academy)

 

This text is taken from the book “Unlock Your Potential with the Realities of Trading”


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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.

Virgin Galactic shares resume ascent with safety fix in the works

Virgin Galactic shares resume ascent with safety fix in the works

Virgin Galactic’s (SPCE) share price took a hammering after the failure of its SpaceShipTwo Unity spacecraft test flight in December, but encouraging news yesterday has seen the stock’s ascent resume.

The aborted test flight on Saturday 12 December led to the share price falling its most since March 2020, dropping from $32 to %26, a 17% decline. That setback for space tourism came after the stock had seen a run-up last year to $35, with the greater part of the climb taking place since the end of October, as enthusiasm surrounding its prospects soared, so to speak.

Since the December mishap SPCE followers have been waiting anxiously for news regarding what went wrong.

Yesterday, the engineers reported back. They now know what happened, which led to the spacecraft’s onboard computer losing its connection with the rocket engine – triggering a halt to the ignition mechanism, as it was designed to do.

The fact that the failsafe mechanism kicked in was actually very good news in itself, but now the engineers say they know what actually happened that led to ignition halt.

Here’s the text of the tweet from the official Virgin Galactic twitter account yesterday:

Thread: following our test flight on December 12, 2020, we have completed the post-flight inspections and root cause analysis of what caused the onboard computer to halt ignition of the rocket motor. Corrective actions have been defined and work is already underway.

Once this corrective work has been implemented and verified, we will confirm our pre-flight timeline for the next test flight and share expected dates for when the flight window will open.

https://twitter.com/virgingalactic/status/1347145056998850562?s=20

Although there is no detail of what exactly went wrong, Virgin Galactic would not have gone on record with news of corrective action if there wasn’t a fix in motion, although the lack of a timeline may be seen as disappointing.

But judging by the share price move yesterday, the market is taking the update as a signal that the company is back on track for a successful test flight that hopefully will involve no further teething problems.

Strong ticket sales means there’s money in the bank

Galactic is a unique company in as far as it is unusual for a company without a working product to already have recognised revenue on its balance sheet.

The company has already pre-sold 600 tickets at a price of between $200,000 and $250,000 each. Chief executive Micheal Colglazier said on a 3Q results call in November last year that he expects each of the spaceports it operates to generate revenue of around $1 billion, with each targeting 400 flights a year. On those projections ticket prices would probably need to rise to nearer  $400,000, according to UBS analyst Myles Walton, but Virgin Galactic reckons strong demand means that’s not an issue.

We expect the share price to continue its recovery as expectations build for a successful test flight.

spce 4 hour price chart
SPCE 4-hour price chart, 8 January 2021 (Courtesy TradingView)

The lack of timeline detail has already been noted but, significantly, there was no retraction or amendment of the company’s previously stated intention of flying Virgin founder Richard Branson into space by the end of the first quarter of 2021 and to restart ticket sales shortly thereafter.

December’s aborted test flight was the third, with the other two taking place in December 2018 and February 2019. The company currently has two spacecraft and is working on a third at a cost of up to $55 million. It will need quite a few more spacecraft, and the motherships for the air launch system too, so there’s plenty of Capex to come ahead. But if it can get safety right, then the company will secure a first-mover advantage over efforts from the likes of SpaceX and Blue Origin.

In the eToro app, go to ‘Trade Market’ or ‘Watchlist’, click on search icon, enter the ticker, select SPCE and click ‘trade’.

You can find the order you opened (if its premarket) under the ‘Portfolio’ section, where you will see ‘pending order’ – click ‘view’ to set the order details

Sister company Virgin Orbit provides the air launch capability and it is conducting its next test launch of its LauncherOne rocket on 10 January (this Sunday) in its second attempt to get its satellite delivery vehicle into space, and it will be closely watched by Virgin Galactic shareholders. The rocket takes off from a modified Boeing 747, which will take off from the Mojave air and spaceport between 1 and 5pm Eastern Time.

And rising wealth inequality may arguably be bad for us all, but in this context it means that there are plenty of people rich enough to afford $250,000 or more for multiple rides on the six-passenger spacecrafts Virgin Galactic is taking into low Earth orbit.

Those of a more nervous disposition might want to sell before the next test flight takes place, but then risk being out of the market for the certain boost the share price will receive on news of a successful test flight.

We rate SPCE a buy with a near-term target of $35.

You can buy SPCE with no commission or stamp duty on eToro.

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Author : Gary McFarlane

Gary McFarlane

The author is the financial editor at Finixio, the publisher of buyshares.co.uk, stockapps.com, learnbonds.com and insidebitcoins.com. Gary was the cryptocurrency analyst at the UK's second-largest investment platform, interactive investor, from 2017 to August 2020. Gary is the winner of the Best Cryptocurrency Writer 2018 ADVFN International Awards