How To Improve Your Trading Skills

I believe every trader constantly asking that question on how he/she can take he/her the next level. I have found this rule very useful and universal, and yet not many people paying much attention on it. So I guess it could be an edge once you understand it and utiiize it fully.

Rule of 80/20. Once understand it, you can apply it to many areas and knowing where to focus your energy to get the max output.

Basically this rule states that 80/20 is the proper ratio for many things at final end.

Example:

1. In US 80% of wealth is control in 20% of population.
2. 80% of your income will come from 20% of your skill set.
3. Freeway usage, 20% of the time will contain 80% of the traffic. (traffic jam)
4. 80% of the market volume came from 20% of the people.(Institutional involvement)

But a lot of time the ratio could be 90/10, 70/30 or 60/40. Basically the idea is that things are not evenly distributed as 50/50, there is bias toward one side and the ratio of 80/20 usually can give very good approximation.

As an individual trader, how can we improve our end result base on this rule.

Basically, once you got enough data, you can then find out which system fit under this rule, then improve on this system

For example: you have 5 different systems. and one of them performs better then all other 4 systems, and produce the 80% of your profit. Then by increase position size on this system, you will be able to produce much bigger result.

Come to think of it, the famous turtle trading system utilize this concept well. Turtle system will add to a position when the trend is on its side, then keep adding positions until the market go against it.(but it dose have a max size allow for each position).

So in other word, when it catch a trend, it will capitalize on it. even with a 30%-40% winning ratio, turtle system was able to get an good annual return for its investors.

These are some the best traders who max out this 20/80 rules. when that 20/80 ratio show out, capitalize on it will improve your trading result dramatically.

PS: I do not recommend people to just using trend-following system, especially on intra-day bases. These are just meant to be an example. Basically trend-following system needs a lot of money and nerve of steel, and most people just do not have that combination.(my opinion on trend-following system)

USB 3.0 from Intel, Buy Intel (INTC) stock

PCWorld reports that a faster version of the Universal Serial Bus ports are on the cards… Intel, spearheading the movement, along with other companies, are working together to promote USB 3.0.

USB 3.0 is said to deliver 10 times the speed of USB 2.0. The data transfer rates for USB 3.0 are charted at 4.8 Gigabits per second (Gbps) (the speed of USB 2.0 being 480 Mbps).

Intel stated that the USB 3.0 specification would be optimized for low
power and improved protocol efficiency. The USB 3.0 ports and cabling
will be designed with both copper and optical cable capabilities,
meaning even higher speeds will be possible in the future.

Intel has already unveiled a Wireless USB transfer format, operating at 480 Mbps.

These improvements, as usual, will mean a lot of implications…

* USB 2.0 obsolete
* USB 2.0 cheap as hell
* Increasing dependency on USB… Maybe even for local networking?!!
* Damn fast pen drives!!!

Hopefully, we’ll see USB 3.0 by next year.

Make Money by Channeling Stocks on Margin

I am going to share the ideas on how you can channel stocks and be your own hedge manager.

1) Start with a capital of $10,000 in your trading account

2) Read my other posts and select a stock that swings +/- $1 in a week

3) Say if (SIRI) is trading at $10, then buy 1000 shares of (SIRI)

4) Use margin, short 1,000 shares of this (SIRI) at $10

5) Assuming that (SIRI) stock moves +/- $1 in week, you will be able to earn around $2,000 per week by covering and selling your position

If the market is favourable, your annual earnings will be $100,000.

The $1,000 investment for an year can earn you a phenomenal rate of return of 1000%

I would love get blogged from fellow readers if they are using my trading strategy and find it a key to their financial success. I also encourage to post any alteration of this trading technique.

Note: This stragegy may not be suited for all traders. Please consider market risks carefully before investing.