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Read Fisher's book know it well. One of the best insights he has is that if the instrument is moving hard one way and no one can explain why, then get on board. By the time the reason is obvious the move has occurred. That happens in FX at least once a year where you get a break out or...

Red Duke - how much time do you give your trade to work? And have you ever had times when you busted out of trade only to see it skyrocket your way? The reason I ask is there are two school of philosophy on the subject. Some traders argue that if the trade has not hit your stop there is no...

Couldn't agree more. Catastrophic stop is critical for so many reasons - power goes out, connection drops you have an emergency that pulls you from the trade etc. It sounds like you trade stocks, if so what would be your catastrophic stop on position. BTW some traders I know set a stop as %...

So one of the most interesting things that came out from our conversations with traders is that you don't have to hold a large portion of the position to make very big profits. As we write in the book "Everyone wants to be able to let their profits run, but in real life financial...

Cy after three entries if it still goes against you - how much do you let it ride? And also when you do get hit how bad is the hit? Is is 4 or 5 times your average win?

OK, here is another valuable insight that we uncovered from our interviews. ALMOST ALL SUCCESSFUL TRADERS SCALE OUT. I know there has been a tremendous amount of threads about scaling on Elite and I know that all the engineers and all the mathematicians will tell me that scaling out is a...

Yea - here are my thoughts about it pre-NFP http://www.dailyfx.com/story/bio2/Yen_Firms_as_Fears_Grow_1189160007582.html One other theme that may be starting to form in the currency market is that we may witnessing the first signs of the end of the global tightening cycle in rates. The...

Kt - that's very interesting. Without divulging anything proprietary can you give us an example of an algorithm that you may use to make trading decisions? And in the much broader sense - are you a reversion to the mean trader or a momentum trader - or if neither could you give us an idea...

Yes Redduke couldn't agree more. Please understand when I use the word psychology it is not meant in the "rah rah" Tony Robbins kind of way but rather as synonym for behavior. The edge comes from accurate understanding and interpreting that behavior. - which frankly is a b-tch to do.

Kt - let me clarify. What I mean is that the game is all about INTERPRETING psychology, not the "rah, rah, feel good" psychology of self improvement gurus. Although you may disagree with that points as well, If so I'd like to know your opinion in more detail of why you think trading has the...

Thanks surf I have as much fund reading it as I did writing it, which is rare for me. Any parts you liked in particular?

Jack - I have never seen you trade nor have I seen any records of your trade. I HAVE seen the people I profile trade in real time with their actual money. They live very nice lives and provide for their families with their trading. You from everything I've seen on Elite spin nothing but utter...

One other very good technique that many of the traders in the book used was probative trading. Almost none of the traders used their full position at the start of the trade. Most of the guys whether they trades equities or futures of fx would use an "excursionary" orders to test out the...

Dana's approach is also very interesting because he uses a multitude of strategies. This, in theory, I think is a great methodology because we all know that diversification mitigates risk. Unfortunately some of us are one trick ponies. I for example am only happy when I trade 1 strategy at a...

Dana chapter is awesome - the part where he buys $1 stocks after the Nasdaq crash was just pure brilliance.

Why your daughter? Does she trade? You are right about the discipline - it takes 10 years to be a surgeon at least 5-6 years ti be a good litigator, most people simply stop before they acquire any proficiency. Add to that the fact that trading has an enormous of chance and like dramatic arts...

The next idea I want to explore is the necessity of testing your method. One guy who was very successful trading equity made the transition into day-trading futures. But before he ever bought or sold a contract he paper traded for 3 months day in and day out until he could show a profit...

As I said the key difference is that they guys trade their own money - in a few cases much more than $2M - which they earned in the markets and they put on teh line every day. Give it a read you'll enjoy it.

True but they exit one trader in the book has only two losing days in the year to date that I interviewed him.

Yes - I think that's definitely true. Smaller size makes individual traders much more nimble - the flip side is that they can't bully the market like institutions can. The thing that I think destroys many good traders is the brush with illiquidity or "fat fingers" especially in the...