Here is a “why” question we can answer: “Why does Contrary Thinking work?” We have all heard the cliché that ninety percent of all traders lose money in the venture of futures trading. There are many reasons for this; lack of discipline, no trading plan, under capitalized, emotional issues, technological breakdowns, antiquated software not to mention one of the biggest issues: believing everything you hear on TV or “misinformation.”
You probably know all of this, since you are talking to a trader and professional system provider whose goal is to solve all or most of these problems for his clients. However, while we all have a handle on 7 deadly sins listed above; there is one chink in the traders armor remains unnoticed that naturally leads to the trader’s downfall and that is, a lack of understanding. A good trader or investor knows that it is more important to know “what” versus “why” and he knows the difference between “price” and “money”, he understand the difference between a “news event” and the “market’s reaction to the news event.” As a market technician, as a trader, price is everything, value is nothing. All a system needs to know is what the price is today and what the price was historically. Today’s price is the end result of the battle between the forces of supply and demand. The goal of a market system is to forecast the direction and amplitude of future price. The system focuses on price and price only. Economists and the vast majority of business news readers are concerned with “why” price is what it is. This is ultimately asking the wrong question. A good system and a good trader doesn’t really care about why, it’s irrelevant. The simple reason why “prices” go up and down is because there was more demand than selling on the way up and more supply than buying on the way down, you don’t need to know why! What is contrary opinion? Contrary Opinion is a sophisticated analytical technique used by astute speculators to take advantage of important trends and turning points in the market.
It has been historically well observed that the prevailing sentiment of the vast majority of market participants at major market junctures has been absolutely, utterly, and completely wrong.
The public has duly demonstrated, time and time again, its uncanny ability to be wrong at precisely that point in history when it was most important to be right. So if we know what the public (the punter) is buying at a frantic pace we know what to avoid. If we know what the public is not buying we also may know where the hidden opportunities may be. Today 73% of all investors and traders prefer to day trade the stock index futures. While in the face of global historically high prices and wide daily ranges among the commodity (currencies, metals, energy and food) futures, only 23% of today’s traders are involved trading them. If there is a conclusion, it would be that the better opportunity trading is with the nontraditional markets and the commodity futures. They just may be an over looked opportunity by the majority. Until there is a wide spread frenzy- a heaving public attention for these markets – the trend will not end and seems to have a very long way to go before it is over. When you visit our updated web site you will find a few new added features that benefit system traders. 1. We are now able to offer all of our trading indicators and strategies, including FX, to NinjaTrader and MetaTrader users. This is being enabled through a new partnership with MooreTech, LLC / Tyler A. Moore. 2. CBI is also offering a new excel spread sheet – free to download -to help you track your trading so you can keep your edge on. 3. We have updated the real time track record through the end of November for the 21 futures trading strategies. Trade by trade reports and summaries available online. 4. We are uploading our complete library of technical briefs to the site in “pdf” format so you can download a read at your leisure. 5. There are fresh Audio/Videos covering the rationale behind the systems on the site for you to better understand the concepts behind the systems. Yesterday’s history, tomorrow’s a mystery. It’s all about what you today.
Jack F. Cahn, CMT
TraderAssist®
Since 1989, Creative Breakthrough, Inc. CTA Copyright 1989-2009
http://www.traderassist.com
Skype me today at traderassist
Or call 800-618-3820 or 561-283-1936
Creative Breakthrough, Inc. (CBI), a registered CTA. CBI offers real solutions to the real issues which traders face daily in the high risk / high reward futures and FX markets. Since 1989 CBI has provided proprietary cutting edge methods and strategies that rank among the top performers. Supported Platforms include: NinjaTrader(TM), TradeStation8(TM) and Strategy RunnerXML:NAMESPACE PREFIX = SKYPE / (TM).