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How to play the game

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Why Trend Trade?



Ok, I know what you’re thinking.

There’s a Million different ways to make a million different bucks, so what’s this Trend Trading all about then, I hear you ask.

Well, let me explain.

I know many of you are likely struggling at the moment (I’m not aiming at you personally, it’s more of a percentage thing), because I know 90% of Traders can’t do it, and I know 90% give up.

Let me follow up by saying, I’m not here to gloat, or to say to you that you should do things my way, or even tell you to change your approach… but if you’re wondering what this Trend based approach is, allow me 2 minutes of your time if you will.

When answering the question at the beginning of this blog, Why Trend Trade? I often take myself back to the "former" me... the loose cannon who'd go flying into trading earnings reports trying to make a quick buck, or getting in at the market open trying to identify tops and bottoms using 5 minute time frames to pinpoint entries.

I pretty much asked myself the question… Do I want to be more Michael Jordan-like in my approach? or do I want to carry on being a regular loser… I chose the Jordan approach.

Looking back with a bit of rational thought, it was completely crazy - and this was only 4yrs ago - oh how times have changed.

Let’s consider for a moment that the Trend based approach does NOT discriminate on whether the market is moving up or down…what if I told you that EXACTLY the same rules and principals apply?

For those that struggled recently with the Market Corrections … there’s an incredible way to make money in a bear market, you just need to educate yourself, I know it’s sounds easy, and many of you reading this will carry on doing the same old thing and getting the same old results…. and although incredibly sad to accept, the definition of insanity is to carry on doing the same things, expecting different results - it seldom works out well.

As a Day Trader (which I know is the cool hot girl at school), in the past, I was always trying to impress her, and almost inevitably - i'd start stuttering the second things begun to look promising and then before long i'd be sitting with my face in the mud asking myself - what the hell just happened? It makes me cringe that this pattern continued for a such a long time before I finally found someone who could help me remove the bad habits.

When debating the Trend Trading v Day Trading pros and cons... i prefer to look to the statistics, because I'm pretty calculated when it comes to numbers..... and the numbers don’t make fantastic reading…. because (according to Forbes Magazine) - 95% of Day Traders (although some other leading sources actually say 97%) lose money - and when you look at it rationally, it's not rocket science to understand why.

If that statistic applies to you and you want to make a change - what's the harm in learning a new approach? Whats the worst that can happen?

If we take an example such as a stock like NVDIA (which traded in May 2016 at $40) and observe its move to $300 - if you were astute enough and taken a position, that’s an INCREDIBLE return in just couple of years and 1 of my new clients made $2.1m trading Options on this very stock.

NVIDIA HUGE move.png

This is guaranteed Income and this is not even taking into account the process of Compounding or adding to your position over this time period. As a Trend Trader - that Stock is LIFE CHANGING.... depending on your risk tolerance and your initial outlay - NVDIA would give you everything you need to make huge difference in your life (especially if you had used Leverage) and obviously on the assumption that you had stuck it out through all the ups and downs.

If you are a Day Trader moving in and out of positions on NVDIA over the same period - the simple facts are - you will NEVER make the same life changing sums of money - you'll have incredibly good days and you'll also have terrible days, but you’ll probably lose overall, and that’s not even factoring in the stress of it all. 

Lets now consider that there are MANY stocks like this - what if you had traded all of these stocks like a lot of Trend Traders have and just held onto them instead of selling them every 5mins? You're talking about an astronomical sum of money - and again - that's not considering the use of Options or Leverage - the best part about it - once you're in a trade - all you need to do is manage it - which takes 10mins a day - you're earning astronomical sums of money - but you also have the time to live life. (maybe i'll touch on this in another blog) - what could be better than that?

In a nutshell - Day Trading is primarily to generate weekly/monthly income, much like a job.... but the REAL money, and the consistency lies within Trends.... and riding them all the way up (or down).

The tough part is really just learning the Technical Analysis, learning how to identify only the best opportunity, and how to manage the trades…. it’s hard… but it can certainly be learned.

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