5 Traits of a Highly Successful Investor

Posted on by The INO.com Team

With all the recent action I think we all need a reminder of what makes a successful trader. Above is the post from Adam on the Traders Whiteboard series and those videos are a GREAT place to start. But Blain from StockTradingToGo.com has also given us a list and what you need to do. Enjoy!

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With the bear market in full force and volatility at record highs every investor needs to be trading
at their best. For the active investor there is no room for error when the market is swinging 10%+ in
single day sessions.

Here are five traits of a highly successful investor (in no particular order):

1. Discipline - Every investor has to be disciplined in the market. If you can’t follow your own rules and stick to a strategy, you may find yourself laying dead in the battlefield faster than you know. Discipline is the most important trait of a successful investor because the market is full of temptation to make dumb mistakes day in day out.

2. Patience - Act too quickly and you may just get burned. Some traders will step back and wait months before making a trade, why? Because they are patient hunters looking for the right moment to strike. Right now one fact is certain, cash is king.

3. Dedication - Invesors that are not dedicated to the market will get punished. Some of the best managers are up at 4:30 AM if not earlier to start their day and map out potential plays. It doesn't matter how late it is at night, preping for each and every day is critical.

4. Guts - When you bet nine months in advance that Apple is going to take off and you place $100 million on the table, you have guts. Some of the best traders in the world have taken bets that no one else saw or agreed with, but had the last laugh in the end.

5. Perseverance - Probably the X factor of successful trading, perseverance is critical to success because let’s face it, not everything is going to go your way. No one cares that you have thirty years experience behind you, without a solid track record you are a nobody. The best part of the stock market is that history has shown the game repeats itself. Investors may loose their rear today, but in three months when the same trade comes around they will know what to do.

Please take time and visit StockTradingToGo.com and work with the network of smart investors spending time there!

Seven free trading lessons from Adam Hewison

Posted on by The INO.com Team

I created "TRADERS WHITEBOARD" to help traders understand and benefit from my years of real world trading experience both in the pits of Chicago, and from Geneva, Switzerland .

Click on the image to play





Look for more educational Traders Whiteboards in the near future

If you enjoyed this educational series, be sure to check out our next video series titled, "90 Second Trading." In this series we cover trading in stocks, futures, forex, crude oil and gold. For a limited time only we are making this series available free of charge.

Watch with our compliments.

Look at our logical approach to decision making.

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Crazy Columbus Day ... plus more horror stories

Posted on by The INO.com Team

There's no doubt about it, these are crazy times in the market.

My business partner, Dave Maher, came up with the new name for one of the most volatile days in market history ..."Crazy Columbus Day." I think many of us in the industry will always refer to Columbus day with a crazy in front of it.

This is the time to remain cool, calm and collected. Looking back, how did this all happened? It was like a snowball rolling down a hill, gradually building over a period of time and turning into a huge problem. Now that we are sitting in the dust of the crash we ask, who's to blame? It doesn't matter if you're on the Democratic side of the aisle or the Republican side, both parties are to blame for the mess we are in now.

Legendary speculator, George Soros doesn't understand them.

Felix G. Rohatyn, the man who saved New York from financial catastrophe in the '70s, calls them “hydrogen bombs.”

Warren E. Buffett calls them “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

They are all referring to the non-transparent derivatives market. All of these well known financiers figured out the dangers of these toxic financial instruments years ago, yet the Chairman of the Federal Reserve insisted that everything was fine and that the risk in the derivatives market was well spread out.

There was one woman that the CFTC who could have prevented this financial mess. However, this woman left the agency after being verbally beaten down for warning of the possible crisis. Could she have stopped the snowball before it began rolling?

I recently read an article in the New York Times newspaper (online) that I think you'll find fascinating, as I know I did.

Having been a member of several futures exchanges I know that transparency is without a doubt the key to a healthy and vibrant market. The lack of transparency for the past 12-15 years in the derivatives market is nothing short of criminal.

The lack of transparency allowed large banks to make unusually big profits as no one had any idea of what they were actually trading. It all sounded so good on paper. Structured investment vehicles (SIV), collateralized debt obligations (CDOs) all of these looked great in the derivatives modeling world. Unfortunately in the real world, financial modeling does not always work out. And when it comes to big money, the element of greed always comes into play. Greed is something you cannot model into an equation.

Here is the link to the New York Times article I hope you find it interesting, informative and eye-opening.

Adam Hewison
President, INO.com
Co-creator, MarketClub

Fear is not an option for successful traders

Posted on by The INO.com Team

"The only thing we have to fear is fear itself."

Thus spoke Franklin D. Roosevelt 75 years ago.

Looking back on Roosevelt's speech in 1933, 4 years after the infamous crash of '29, he was referring to the economic conditions of the time -- better known as The Great Depression. In essence he was saying that if we can't shake our pessimistic economic outlook, it will be tough to turn things around.

The question is... are things different this time?

The answer is yes and no. People are still fearful of what the future holds and they have very little confidence in the economy. The big difference between the crash of '08 and the crash of '29 is that we now have India and China on the world stage. Back in '29, both of these countries were not on the radar. In fact India was under British Rule.

Both India and China's economies will suffer with the turn down here in the US. They are now going to have to generate their own domestic consumption patterns for the goods and services they formerly sold to the US. This is going to be hard to do as so much of their economy is based on exports which are evaporating quickly.

The fact of the matter is that the markets are extraordinarily turbulent. We do not expect, even with the worldwide bailout, for things will be rosy again anytime soon. However, that does not rule out some extraordinary trading opportunities in the markets. This is a time for rational thinking. It is also a time to eliminate fear from trading.

There is no need for fear in one's trading plan if you're running with a diversified program that has proven to be successful over time. What I mean by over time is not just the last six months, or six years, but over a long period of time I mean as much as 30 years.

When you have a program that puts the odds on your side, you can trade with confidence knowing that you're going to lose some small skirmishes in the market, but overall you will make money based on your own trading decisions.

Many of you know that we trade using MarketClub's "Trade Triangle" technology. This approach has proven successful in all types of markets, including the ones we are in now.

I've put together a short 12 minute video to show you how we have fared in three different markets using this technology.

For a small percentage of you, this video will be an eye-opening experience. For another percentage of you, you are already fearless MarketClub members. There will also be some of you that are successful traders using your own system, and there is probably no need to watch this video.

Trading should be an unemotional experience. If you are trading for the excitement, odds are you're going to lose. If you are trading just to say that you trade, you're probably going to lose. If your trade for any other reason than to make money, you're probably going to lose.

The possibility of successfully trading any market is out there. This video will show you how our unemotional, time tested approach to the stock, future, forex, etf, and mutual fund market will put the odds in your favor that you are on the right side of these extraordinary trading times.

"The only limits to our realization of tomorrow will be our doubts of today."
Franklin D. Roosevelt

Every success,

Adam Hewison

President, INO.com

It takes a long time for a market recovery

Posted on by The INO.com Team
This from our media partner Associated Press.

The Associated Press
Monday, October 13, 2008

NEW YORK: It has taken Wall Street considerable time to recover from crashes and for investors to regain their confidence and decide it was safe to put their money into stocks again. A look at how the market recovered from its two best-known crashes, and how much it needs to recover from its latest plunge.

When the market crashed Oct. 19, 1987, sending the Dow Jones industrial average down 508 points to 1,738.34, the blue chips had lost 938 points, or 36.1 percent, since reaching a then-record close of 2,722.42 on Aug. 25, 1987. It took just over 15 months for the Dow to get back to its pre-crash level, and almost two years to the day — Aug. 24, 1989 — to reach a new closing high, 2,734.64.

_The recovery from the 1929 crash was more difficult — and spanned a quarter century. The Dow had reached a high of 381.17 on Sept. 1 and then began drifting downward. Although the date of Oct. 29, 1929, Black Tuesday, is probably best-known by the public, many market historians say the crash began on Thursday, Oct. 24, and accelerated the following Monday and Tuesday.

From its close of 305.85 on Oct. 23, the Dow tumbled 75.78, or 24.8 percent, by the time it ended at 230.07 on Black Tuesday. It continued its decline to a low of 198.69 on Nov. 13, giving it a drop of 107.16, or 35 percent.

That also made for a drop of 182.48, or 47.9 percent from the September high. But stocks kept on falling as the Great Depression wore on, and the Dow fell to 41.22 on July 8, 1932, giving it a loss of 339.95, or 89.2 percent from the September 1929 high.

The Dow did not close above 305.85 again until April 1, 1954, more than 24 years after the crash, and it didn't return to 381.17 until Nov. 23, 1954, a quarter century after Black Monday and Tuesday.

The Dow has a large percentage drop to regain this time. By Friday's close, the average had fallen 5,713 points, or 40.3 percent, from its record finish of 14,165.43 a year earlier, on Oct. 9, 2007. More recently, it fell 2,970, or 26 percent, from its close before the Sept. 15 collapse of Lehman Brothers Holdings Inc., the event that triggered the freeze-up in the credit markets and that sent stocks plunging.

With Monday's advance of 936.42, the Dow is still nearly 4,778, or 33.7 percent, below its record close.