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Traders often believe that all they need to learn about trading to be profitable is a ‘set-up’. Unfortunately what they don’t realize is that learning a ‘set-up’ is only part of the puzzle. A profitable ‘strategy’ does indeed require a ‘set-up’ but it also requires an understanding of a much bigger picture. 

Usually mastering the set up is just the first step. A well structured and concise set up shouldn’t take a competent trader very long to master. However, mastering the bigger picture takes a trader more time and effort.

Trading based on intuition, instinct or gut feel is something that the experienced trader relies heavily upon.   Like a professional footballer often knows instinctively where his teammate is before the pass is made, the professional trader too has an intuitive feel about the markets that he or she has learnt to trust over time.  Unfortunately new traders also make decisions based on their instinct or 'gut feelings' in an area where they have minimal to no experience.

In this video, Nick McDonald discusses who should trust their intuition and how traders can develop a system to learn to use it effectively.

Many index futures traders choose to trade the open or the morning session. There are many advantages to doing so, the opening gap and the strategies surrounding it for example. For many years I focused almost exclusively on the open however due to forced a change in my trading routine recently with a change in time zone (spending the summer in New Zealand), I have started to trade the closing session and discovered that it too has numerous advantages...

Two of the technical tools that we use at Trade with Precision, the ADX & the RSI,  were created by a legend of the trading game... a man described by Forbes magazine in 1980 as "...the premier technical trader publishing his work today."

This same trading legend now lives in my home country of New Zealand and a trading buddy of mine was recently fortunate enough to meet and interview him.   His name is J Welles Wilder.    The interview with Oli Hillie brings up some amazing lessons for us as traders as well as predictions on the price of gold for this very month (Feb 2010) and beyond. Following are segments from the interview that I think will be of interest to our readers.   To read the full interview, see the link at bottom of page. Happy Trading! Nick McDonald
Nick's pick for the top piece of advice from the interview: OH: What are the reasons you have succeeded in technical analysis and trading while many others who have tried have not succeeded? WW: Tenacity and flexibility! But when you find something that works, use it! Don’t keep looking for something else. On Gold Predictions: OH: Can you make any general recommendations on trading today? WW: If I was to give advice on making money right now I would advise only trading gold and silver and gold and silver miners from the long side. I expect gold to be at US$5,000 an ounce in two years time. Before then, my charting system suggests that we will see an intermediate high in gold around February 10, 2010. US$5,000 might be slightly ambitious but it could be in that ballpark. [On both occasions I visited Welles Wilder he showed me his current stock portfolio and hisP&L. As he recommended, every one of his 16 holdings was either a gold or silver related instrument. On my first visit 15 of the 16 showed a profit. On my second visit all 16 were profitable.] OH: Why are you so bullish on gold? WW: Big banks and central banks have been selling gold, keeping a lid on the price. But Hedge Funds are now jumping in because it is one of the few ways they can preserve the value of their funds. I think the buying power of the Hedge Funds will eclipse the selling power of the banks. On His Book "New Concepts in Technical Trading Systems": OH: Back in 1978 $65 was a huge amount of money for a book. How did you go about selling it for so much? WW: I thought big! Back then most books sold for $5 or $10 at the most. OH: Was the book then taken up by a publisher? WW: No it has never been published by anyone but me. Incidentally the book sold over 3,000 copies last month (August 2009) alone. [Note that the book was first published in 1978 and has not been changed or updated since then. It still sells for exactly the same price it did in 1978 – US$65. This represents a self publishing phenomenon, over 36,000 books sold per year for a book written over 30 years ago.] On Technical Trading: OH: What have you found to be the most robust technical analysis tools over time? WW: Let me just say, the simpler the better! What I prefer to see now is a stock or a commodity that has put in a base and has just started rising out of that base. I pretty much look at the charts. OH: If you were 44 years old (the age of the interviewer) and a full time technical trader, what would you do? WW: The same thing I am doing now! Just like I said before about reading charts. On Mistakes: OH: What mistake have you learned the most from? WW: Not knowing how to handle money. You learn by making mistakes. On New Zealand: OH: Why did you leave the US and move to New Zealand in the 1980s? WW: 25 years ago I had the insight to know that the US was drowning in debt. I thought: “What is the best country in the world?” Is has to be a small country with a democracy. It has to be neutral and have no enemies. New Zealand has been a wonderful place to live!   Mr. Wilder was interviewed for Oli Hille’s Ebook, “Creating the Perfect Lifestyle” which will be launched in May 2010. The full interview with Mr. Wilder’s views on gold and other trading issues in the current climate can be accessed through Mr. Hille’s website: www.author.co.nz. Also on the website is a lifestyle interview with New Zealand Prime Minister and ex-trader, John Key.