By Alexander Straker
The motivation to excel as a trader is obvious, there are clearly many ‘life advantages’ to acquiring this skillset. The ability to essentially pull money through a computer screen from any location in the world leads to an internally known and felt freedom unlike any other. Why is this the case? Well, consider what it is that necessitates that you exchange the most valuable hours of each day for your freedom? Modern economic imperatives dominate the majority of most people’s important decisions and breaking away from this ‘rat race’ requires considerable intelligence, planning, discipline, hard work and skills.
Statistically it is only the minority that actually retire in a position of true wealth. In Australia for example the bureau of statistics tells us that at age 65:
Approximately 1% are retired & truly wealthy – lots of life choices
4% are self-funded retirees without needing assistance
10% are still working – retirement funding shortfall
30% are deceased – never made it to retirement
55% are retired but dependent on funding either from government or family
When we consider that most people are on a 40-40 working plan all their lives (40 hours per week for 40 years), these are extremely poor and quite shocking statistical outcomes!
Accumulation of wealth for whatever reasons seems, in reality, a more difficult life task than most young well-living men and women anticipate it to be. It almost seems as if certain forces conspire to sabotage our attempts to ‘get ahead’, sapping our resources and energy away gradually and making long term accumulation difficult to achieve. In reality, it is our reflection of our own inner self’s subconscious world view surfacing in our lives
For a large number of years now, our ability to independently perceive, let alone actively seize the multitude of wealth building opportunities endlessly being presented to us is unnecessarily limited as a result of being taught to think of our lifeline as having to follow a certain traditional pathway.
The lifeline formula is installed into our brain as a child by society. We learn that first we should go to school and be taught very little about a whole lot of subjects many of which we find boring, and that we must learn all this useless information so we can strive to compete and be in conflict with our peers, in order that we prosper ourselves over the long term. Makes perfect sense, right?
This all leads to a long running competition for that all-important position in university or college, and then onto the next competition of finding the ideal ‘employment’. We are taught that the way to get ahead is climb over the top of other competitors at all costs, never mind if they get squashed or bruised, that is just part of the game.
The prize at the end of this wonderful way of existence is being able to buy more toys than your competitors can, running with the most competitive herds, and, of course, you get to show off and display the toys right in the faces of those lower grade herds! Isn’t the wage slave life wonderful?
Those of us who still possess enough faculties to think and observe the world independently tend to awaken over time to the ridiculousness of this traditional lifeline formula that is thrust on us right from the beginning of our lives. The financial imperatives are largely in charge of our lives. We have learned that, for some reason, we are the only species who must ‘pay’ in order to share in the resources of our planet.
We come to realise that this externally driven, shallow, meaningless and horribly inefficient approach to building our livelihood is irrevocably ‘broken’, and we are far better off unlearning this system and starting the education and life-skills building process all over again, this time coming from motivation within ourselves. There are differences in our new approach, first there is a desire to learn. Fancy that! We actually look forward to learning and applying the knowledge. Instead of seeking to compete with our peers we seek to harmonise, and we finally start to realise the meaning of ‘the sum of the parts is greater than the whole’.
A new realisation dawns that we always had the skills and purpose within us, and it is our own active internal processes that have uncovered and brought these skills to life. No longer does someone need to shout instructions at us from the sidelines. We are being internally guided, and our own personal motivation is more than enough to sustain progressive leaps forward towards our ultimate life goals. It has never felt better than this, and results come as naturally as breathing.
Let’s bring in a practical example of a full-time trader/investor who has awakened to the ideal lifestyle and unlimited potential that being a full-time self-reliant money manager offers. Part of managing and sustaining this way of living is to consciously manage risk at multiple tiered levels.
This means there needs to be a separation of different risk-level asset portfolios, and each one is naturally managed differently. As a financial planner in Australia, we have assisted many clients to retire early, partly by using this type of ‘tiered risk’ management approach. The main rule to follow is this… as profits are accumulated, move them down the scale of risk.
For example:
High risk tier (active trading)
- Discretionary trading account
- Systems trading account
- Business entity
Medium risk tier
- Property portfolio
- Managed share portfolio (not self-managed – external expertise)
- Private equity partnerships
Low risk tier
- Superannuation portfolio (401k, UK pension plan, etc)
- Bonds
- Gold & Silver
The structure of the investment holdings should look like a pyramid with most holdings in the low-risk tier (base of the pyramid), the mid-range amount in the middle risk tier, and the least holdings in the high-risk tier.
The low- and middle-risk tiers should contain investments that are hands free and continue to perform without supervision or adjustments. Leveraging off the expertise of others (such as fund managers) is useful in the low and middle risk tiers. Basically, these portfolios will provide the passive income for retirement and will need to accumulate a substantial amount of funds for this to be achieved.
As a trader, the high-risk tier is where we use relatively small amounts of capital to fund our account, then run this up into profit as quickly as possible, and here is the key to sustaining the wealth building process… we withdraw our profits at regular intervals and put it into one of the lower risk tiers.
The goal is to not leave large amounts of capital in this higher-risk trading account, and to preserve our hard-won profit by moving it down the scale of risk. Long term we want this capital generating income for retirement. Trading is the process we use to generate quick gains that are then added to the middle and lower risk tier accumulation portfolios.
As a skilled trader, there is little point in funding an account with large capital, as a very small amount of capital can become quite a large amount very quickly if your trading skills are effective.
A regular trading exercise we engage in to hone these skills is trading a $1000 account for a short pre-defined period, usually 1 month, 1 week, or 1 day for intraday practice. There is never any pre-set window chosen for this, like when cycles have predicted a significant change in trend. No, this exercise uses any random week, month or day to trade the trend of that time. This exercise was initially inspired by WD Gann, who first demonstrated such skills in in his 1909 Ticker Interview where he generated 1000% return in 1 month of audited trading, quoted here:
“During the month of October, 1909, in twenty-five market days, W. D. Gann made, in the presence of our representative, two hundred and eighty-six transactions in various stocks, on both the long and short side of the market. Two hundred and sixty-four of these transactions resulted in profits; twenty-two in losses. The capital with which he operated was doubled ten times, so that at the end of the month he had one thousand percent of his original margin.”
While that was an exceptional record, it was not a one-off. In the article Gann’s associate, William E. Gilley, said:
“I once saw him take $130, and in less than one month run it up to over $12,000. Gann can compound money faster than any man I have ever met.”
Inspired by Gann’s consistent technical skills, we have taken up the same practice in the above exercise. Our latest weekly record set in this exercise was running $1000 to $120,000 in 5 days, placing about 120 trades a day, such that we had more than double the number of Gann’s trades in about 1/5 of the time, something only accomplished through modern technology. That was a 12,000% return in one week, which was better than even we expected.
Many people do not believe that such returns are even possible, so we posted our full trading records online including every trade and even a Video showing the online brokerage account login, history and specific trades. You can see for yourself here if you don’t believe it: www.cosmoeconomics.com/EZ/ice/ice/alexander-straker-12000-account-record.php
While this is an exceptional return, it is not the first time we have produced such results, since we have found, like Gann, that this is a technical skillset that can be learned, honed and perfected with practice. While our last results far exceeded Gann’s record, some of that is due to the speed and ease of use of modern tools conjoined with degrees of leverage that Mr. Gann may not have had access to in his day.
It is the tools and training that are most important. We recently beat our own day-trading record of 400%, this time doing 1,318% in one day. It was a volatile day, which helped push up the number, but some days are volatile and others now, which is the nature of trading. We have documented our daytrading records here! www.cosmoeconomics.com/EZ/ice/ice/alexander-straker-course-pendulum-motion-trading-record.php
Unfortunately, if these skills are not well enough developed, the reverse can be true, hence the reason it is wise to only risk a small deposit. It is a case of proving the skills… better to do this with small capital from a risk point of view until the skills are developed.
But the principles remain the same. With the proper tools, the right training, and consistent practice, it is possible to reproduce and even exceed the spectacular trading results of WD Gann in today’s markets. The key point is, that one has to approach trading as a profession, not as a hobby, or as some kind of gambling based upon luck as too many do, so with one big loss, they throw in the towel. If you want to be successful, you must study, practice and make trading a profession, not treat it as a game, and stick with it until you develop the success you seek to achieve.
One of Gann’s main courses was called “Speculation: A Profitable Profession,” and Dr. Baumring is known for saying, “You don’t become a brain surgeon in a day, neither do you become a trader after reading a few books!” Too many prospective traders nowadays do not take trading as seriously as this. They should take this advice to heart if they want to change their position and freedom in life.
We have demonstrated that this is possible ourselves, and have done so multiple times, as documented it both in trading results, and in our series of courses where we have made available the tools, techniques and training to accomplish these results it in our 3-Volume series of trading courses, The Universal Golden Keys. (www.cosmoeconomics.com/EZ/ice/ice/alexander-straker.php)
The knowledge is there for the learning, but your success will only come through dedicated commitment to study, practice and the perfection of one’s skills. Those who apply themselves to anything in life via such an approach will find success at whatever endeavour they pursue, while those who nibble at bad information and treat trading like a casino game are bound to fail due to wrong approach. Take the personal responsibility to identify and follow the right approach and work your way to your success through dedicated study and practice and you will, in time, find the success you desire.
