Today's Feature Article

Why Most Traders Fail - Trading Secrets Revealed
by David Jenyns, Professional Trader, Author & Coach

It's no secret that 95 percent of all traders end up going broke within the first two years of their trading career. Why do they lose all their money? What are they doing wrong? I'd like to put forward the idea that it's because they don't treat trading as they would any other business endeavor.

Every successful business I've ever known has had a business plan. It has had a set of rules and guidelines that is followed. Yet, when most people come to the market they fail to put a business plan into place. Instead, they end up going on an emotional roller coaster, governed by how their shares are performing.

With no business plan, the majority of traders approach the market in an inconsistent manner - i.e. they follow whims. One day they trade stocks and the next they trade the foreign exchange. Similarly, they may use one set of indicators one day, and the next day they'll throw these indicators out the window and take on a completely new set. Unfortunately, with no consistent approach, and having their trading decisions governed by emotions, most traders are doomed to failure… here's why.

When traders are faced with a losing trade what do they do? Usually, they end up rationalizing why they hold that stock and why they should continue to do so. The driving force behind this is that they don't want to be wrong. They let their ego get in the way of making profits.

Let's set the record straight. You will not get every trade that you enter correct. You will not make the maximum profit out of every trade. There is no Holy Grail trading system! However, most people, don't like to be wrong. So, what they do is rationalize why they're holding that losing stock. As the stock continues to fall, they'll make more excuses as to why they should hold on.

You may have been guilty of this in the past - I know, I have been. But, it all changed for me when I put excellent money management into place. No longer did I say to myself, "I'll just hold on a little bit longer, and wait until it gets back to where it was last week." No longer did I make up reasons for continuing to hold stocks as the price declined excessively. This was the type of thinking that was costing me big bucks.

Not only was it costing me in losing trades but it was also eating away at my profits too. For example, when a stock price moved into profit… I sold too early. I wanted to crystallize my profit straightaway. I saw the profit as mine, and I didn't want to give it back to the market. The result was that I ended up selling the stocks that were making me money.

Now when you combine those two emotional reasons for holding onto a stock too long and the reasons for selling a stock too early, you can see I was breaking the two cardinal rules of trading. And those rules are: "cut your losses short and let your profits run."

Why do most traders break these rules? Quite simply they don't have the correct business plan. When I talk about a trading business plan, I'm not talking about fundamental analysis or technical analysis specifically. I'm talking about just simply a set of guidelines that you follow regardless of what stock selection method you use.

In fact, through a study of successful traders, I have found there are a lot of different methods for entering stocks. I've seen people use technical analysis. I've seen people use fundamental analysis. I've even seen people use astrology to determine when they buy stocks. Despite these varied entry methods one component remains the same amongst successful traders… they all have excellent money management! These are the rules that have led them to great fortune in the markets.

In fact, almost every successful trader cites money management as the essential component to their success. It's what determines how profitable you're going to be. You'd be well advised to spend time studying this area of trading.

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Today's Motivational Reading

How to change the world while travelling
Dave Boufford

Marc Gold collects the donations (as little as $1 and as much as $500) from approximately 100 people and then takes the money overseas to distribute as directly and intelligently as possible.

I am the representative of those who donate (I also make a donation each time). The recipients are usually delighted that there are a group of strangers reaching out to help them with no strings attached.

The 100 Friends Project is a grassroots project dedicated to helping people in third-world countries facing a myriad of problems.

The project began in 1990, when I visited India for the first time. I met a Tibetan woman in the Himalayas who had a terrible ear infection, and I was able to help her get treatment for under $50 -- an amount her family could not have afforded -- saving her hearing, and probably her life.

I was shocked that something so important could be accomplished with such a small amount of funds. I began raising money among my friends, whatever they could give, as little as $1 or as much as people were able to donate.

Then, in 1992, I traveled to India with over $2,000 in donations, with the goal of distributing it as directly and intelligently as possible. The rest, as they say, is history. I have now completed eight humanitarian missions and dispensed almost $50,000 directly to people in great need.

If you've ever wondered what you could do that would affect someone directly and profoundly, this is your chance.

Your donation can help work miracles, whatever you care to give; you have the ability to change someone's life.

I challenge all of you who are able to make a donation to My Positive Hero's 100 Friends effort, here's a place where even the smallest donation can have a major impact in someone's life. Pass it ON!

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Visit Marc's website
http://www.100friends.com

Today's Subscriber Article

Let the Fireworks Roar!
Frank Hodgekiss

Where did fireworks come from? The story goes that an ancient Chinese cook discovered them by accident when he mixed potassium nitrate (salt peter), sulfur and charcoal together and then lit the mixture. He must have been trying to start a fire for dinner. Anyway, he got a POP, and started a tradition that has fascinated us ever since.

Then just for fun, he put the concoction into a bamboo tube and lit it, and it made a real attention-getting bang! He had accidentally discovered what is now called black powder. It was so loud and impressive, that fireworks, as they came to be known, were considered the perfect thing for celebrations. Surely they would chase away evil spirits!

By the sixth century, the art of making fireworks had progressed to the point where the first rockets were invented. Not only were the rockets entertaining, they also had practical uses during warfare. Dragon rockets were used by the defenders during the Mongolian invasion of 1279 A.D. to shoot arrows.

Fireworks didn't really light a fire in Europe until the display created for the wedding of England's Henry VII in 1486. They were also wildly popular with Elizabeth I.

Fireworks were exciting, but they were colorless until the 1800's. Finally, pyrotechnic experts discovered that certain metallic salts changed the color of the flame. Suddenly fireworks displays got pretty! It was like getting color TV! As you may recall from chemistry class, strontium burns red, barium creates green, copper makes blue, and sulfur adds yellow/gold.

Since then, fireworks creators and pyrotechnicians have competed to be named among the most brilliant and notable practitioners of their craft.

The first major celebration of the art was held in 1892, on the 400th anniversary of Columbus' landing in America. Set off from the Brooklyn Bridge in New York, the fireworks were viewed by over one million people, an unheard of number at that time.

The meeting of the true masters of fireworks happened in 1986, the 100th birthday of the Statue of Liberty. For that historic occasion, three bitter rivals, George Zambelli, Felix Grucci Jr; and Robert Souza worked together cheek to cheek for over a year, harmoniously, to create one of the world's most spectacular events.

The size of this firework display was astounding. Over 22,000 aerial pieces and 18,000 ground pieces were used. This doesn't even count the dozens of pictures, panoramas, and fountains around the spectator's area. The display required a staff of 100 technicians, 220 miles of wire, and 777,000 pounds of mortar tubes, which were used for launching the rockets. The entire extravaganza, most of which was launched from 30 barges, stretched from the Statue of Liberty, up the Hudson River and around the tip of Manhattan, to the East River.

Of course, the fun and excitement isn't just for historic occasions. You can pick up fireworks from local merchants, or even order them online for an extra bang to your New Year's, Fourth of July, or other celebrations. Just make sure to order in plenty of time for public holidays, due to the volume of sales and the increase in shipping around those times.

Write your sweetheart's name on a rocket, light the fuse and let 'em see fireworks.

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Frank Hodgekiss has been working in the fireworks industry since he was 17 when he got a job setting off fireworks displays. His fascination with fireworks grew with the passage of every New Year's Eve and Fourth of July. You can read more fireworks articles at
http://www.fireworkswow.com

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