trading currencies,stocks,profits, trading adviser, making money, trading newsletters, technical and fundamental analysis

Most traders' lives are filled with a continuing series of starts that don't lead to happy endings. The vast majority of traders take daily doses of hope. They're sure that success is just around the corner.

Let's look at a typical trader's story and see how close it might come to your personal experience. If you haven't traded before, let me assure you that the odds are greatly in favor of this being your experience if you start trading and use technical and fundamental analysis.

You are attracted to the futures markets by the thought of "making a lot of money fast without having to work for it." Your initial interest is most likely aroused by knowing or hearing of someone who has made a great deal of money in futures. Your friend or personal acquaintance—or broker—will, from time to time, mention trades that yielded a nice profit. You'll never hear about the losses.

When you ask for details, your friend will tell about trading currencies or in gold—whatever is hot at the time. "This system works" will be the confident summary.

Next, becoming a little more talkative, your friend tells you about more successful trades: one deal made 70 percent on margin in four days, another brought a big gain in selling gold short over the weekend. Your friend sounds so confident, as sured, and successful that you figure you are hearing the ab solute truth and nothing but the truth.

Finally, you can't stand it anymore. You're hungry for that kind of success, so you garner the courage to ask whether you can shadow the next few trades. Your friend agrees to let you in on the next few trades, and you begin dreaming of how rich you will be soon.

Your first trade shows a small profit. The second one, a bean option that doubles in six weeks, does even better. Your dream of being rich is coming to life in your bank account. Maybe it's time to call Kansas for a Lear Jet catalog.

The next trade is a disaster, followed by another loser. You postpone your dream for a while.

When you ask your trading-genius friend what's happening, you are told, "It's just a brief slump—those things happen from time to time." Unfortunately, the losing streak continues, and finally you have to throw in the towel before your spouse gives you hell.

Your friend the expert, however, goes on trading and some how still lives as well as ever. Now, even though you have suffered losses, you've also tasted success. You know it is possible to make big profits; it just isn't easy.

Next, you subscribe to trading newsletters, you read brokerage reports, and you watch financial programs on TV. You find yourself thinking about trading all the time, even when you should be thinking about something else. You have a bad case of the possibilities.

You trade a little on your own, not telling your friend. You do better than you did as your friend's shadow, but you know you have a lot to learn. So you are receptive when a brochure comes in the mail about a trading seminar that will answer all your questions and make you the "trader of the month." Glowing recommendations from former attendees are quoted on every page. There will be a number of speakers, so there should be something for everyone. You sign up for the seminar.

One speaker shows you how to identify major turning points in the markets. She flashes charts of how she made money in the '87 crash and then followed up with a perfect call on the '89 crash. Her track record is incredible.

Another speaker, an Elliott wave specialist, promises an upcoming once-in-a-lifetime opportunity. If you want precise timing, you need to subscribe to his newsletter, fax line, and intraday telephone update. This costs quite a bit of money, but what the heck, you're going to be so rich it won't matter. You think of all the profits he has made, and of how he is such a nice guy to share all this wealth-building information with you.

It is so comforting to finally be working with a professional, someone quoted in The Wall Street Journal and Futures magazine. This is a real trader with a proven, documented track record. It doesn't hurt that he has a Rolex watch and is wearing an Armani suit.

You subscribe, and the newsletter says buy this and sell that. Some of the trades you just don't understand—they don't jibe with what was said in the seminar—but you make them anyway because you don't want to lose out on any profits. Many of the trades work out quite nicely—well enough to offset the losers to sustain your confidence in the seminar- newsletter guru.

The lead-in is irresistible: "This is our last chance. This is like buying gold at $35 or stocks at 800. Sell the kids and mort gage the farm. Commit everything you have—and do it now!" Or words to that effect.

You are nervous but you know you must be bold to make big profits. You sell other investments you own, get a home eq uity loan from the bank, and buy in before it's too late. But the price goes down, not up.

You call your trading guru for comfort and advice and he says, "Wonderful! Just what we were hoping for—an opportunity to buy more at bargain prices."

Your collar's already too tight. You've invested all you can afford and then some.

The price continues downward and you need some money. You sell your futures contracts to pay off the loan. Depression sets in as you wonder what to do with the little money that's left.

You think that maybe you misunderstood the adviser's in struction. He is a registered Commodity Trading Adviser so he ought to know what he is doing. His newsletter continues to talk about how much money his clients are making. Possibly you bought in at a level that was too sophisticated and you need a more basic adviser. You are too nervous to stay with the strategy of the seminar and newsletter.

You read more books, including one called Market Wizards and another on The New Market Wizards. A couple of the stories point out that traders lose money when they trade without a system, when they jump from one trade to another without a careful plan for buying and selling.

That must be the problem! So you find a system that has been used for over 15 years and has produced an average an nual profit of above 30 percent per year. You know you can't go wrong with a system like that.

Well, you do! Just as you begin using it, somehow it suffers its first losing year. Still, you keep on trading. You know that millions of dollars are made in the futures markets every day, and you only want a few of them.

You hear about spreads, where supposedly there is still great profit potential but more limited risk. You are older and wiser now, so you decide to take less risk and be more certain.

You are now very selective, employing only systems with documented track records. You join Club 3000 to commiserate with other mostly naive and consistent losers.

You've become more careful and consistent with your trading. The only problem is that you're not making money consistently; you're on a seesaw of losing and winning. The only consistent part of your trading is the percentage you spend on commissions.

Your scenario has made you decide that track records, re search, and indicators are mostly shams. There is no way to separate the good from the bad advisers nor the honest from the dishonest. You're sure that there must be more crooks in this business per square foot than there are in the Mafia. You are just about resigned that you are not cut out to be a trader.

Still, you have to put your savings somewhere, and you want more than passbook or CD interest. You decide to go into a trading pool, where there seems to be less risk—and maybe more competent advisers. You choose a pool that has been very reliable through a series of winning years with little drawdown.Newsletters and trading advisers may fudge their records, but pools are better regulated.

Unfortunately, the economy turns weak, the market sags, and the pool suffers a setback. It has its first losing year in the last ten.

You are recalled to active duty as a trader. You decide— again—that no one else riding the seesaw will look after your money the way you will. And on and on it goes. You don't even think about the call you might have made to Kansas .