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NO_SECRETS

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					NO SECRETS
By Daryl Guppy
                                                             The essential price information about
 TRADING METHODS                                     securities is available to everybody who is
 CULLING TRADING OPPORTUNITIES
                                                     interested in the market. They get the
         The trader cuts the mass of market data
                                                     information at the same time, and everybody
 down to size using Metastock Explorer or
 ScanVest to look for specific relationships. The    is able to buy and sell at the same time
 charts are also eyeballed, flicking quickly through when the market is open. So where are the
 them looking for chart patterns which are not       market secrets?
 detected by software scans. The chart patterns, or          People often ask why I give away
 trading opportunities, include trading bands,       trading secrets. Is a question I am often
 breakouts and triangles. The trader usually only    asked. It tells me a lot about the way people
 eyeballs for one type of pattern in each scan. This think about the market. They believe that
 preliminary list is then narrowed down on financial success comes from knowing something
 and technical grounds. Traders develop their own    that others do not know. They believe a
 techniques for cutting the data overload so there is
 enough time for thorough analysis.
                                                     trading edge comes from early access to
                                                     information. There is an important trading
edge related to information, but it depends on analysis.
        Getting early information is not an advantage unless we know what to do with it, and this
depends on how we understand and analyze the news. China Daily gives readers an important
analysis advantage which allows readers to make better investment and trading decisions. The
trading advantage comes from the analysis of information and not from its early delivery.
        When I talk about particular trading techniques, approaches, or indicators the same
trading advantage applies. It is incorrect to believe that I have an advantage because I use
techniques or indicators that are secret. Some people think I have an advantage because the
methods I use have restricted circulation.
        This is incorrect thinking. Just because information is widely spread does not mean that
it cannot be effectively used by many players in the market. This is the key advantage of the
information age. The same information can be used by many people simultaneously and they
can all make money.
        Let’s stand aside from the market for a moment and explore a similar situation in a
related field. Many readers would like to play golf as well as Tiger Woods. What stops them
from achieving this level of performance? Is it information and knowledge, or is it skill?
        Golfers can watch Tiger Woods in action on any sports channel. Coaching videos are
easily obtained and we can watch his perfect shots in slow motion, analyzing every movement.
The tools he uses are not restricted. Golfers can purchase the exact same clubs and use the
same golf balls as he does. Tiger Woods is very open about the methods and tools he uses to
play his game.
        We know thousands of golfers eagerly follow the Tiger Wood’s method of golf, but this is
no threat to his dominance of the sport. No matter how hard we try to emulate his golf swing, his
putting, or his choice of clubs we just do not have the skill required to apply this knowledge in a
way that matches his performance.
        Giving away this knowledge is no threat to Tiger Woods. Giving away my knowledge of
trading tools, techniques and indicators is no threat to my trading, or to your competitive
advantage.
        Our trading advantage comes from the way we use our selected tools. The advantage
does not come from exclusive possession of the tools or of information about the market. There
was a time when this was true, but that time has long disappeared with advances in technology.
Now we know that the tools, the information, and the selected indicators are widely available to
anybody who wants to buy a cheap computer and a cable TV. We do not want to be un-
informed, but we must accept that the edge from exclusive information is very small. The more
we know, and the better tools we use, the greater the chance that our skills will improve. We
give ourselves the opportunity to learn and to learn quickly by building on the experience of
others.
        Step off the golf course and return to the market. Instead of watching Tiger Woods on
video you choose to attend a trading workshop, read a book on trading, or try a new indicator
downloaded from the internet. How is this going to give you an advantage? If you believe you
have a ‘secret’ then prepare to be disappointed. Many other traders and would-be traders are
following the same path and using the same information. Most of them will fail and leave the
market, just as most golfers never get their handicap below 10.
        There is only one advantage or trading edge. It comes from the way you apply this
information to your own trading to improve your trading skill. Your success does not take away
from the success of the person who wrote the book or delivered the workshop. His skill level is
much higher and his success rests on how skillfully he plays the same game that you are also
engaged in.
        Trading knowledge is not a secret. When I give away or share trading knowledge I do
not give away my trading skill.
        When you play golf you may aim to match Tiger Woods. When you trade the market you
may aim to match the performance of the trading superstars. You are most likely to fail in that
achievement of these goals, but in the process you will improve your trading results – and your
golf.
he process you will improve your trading results – and your
golf.

				
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posted:12/28/2010
language:English
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