Friday, March 12, 2010

Worrying about you

I have noticed in some recent comments that people with little or no market experience are thinking about following my trades using ETFs or (worse) futures. DON'T DO IT. You are almost guaranteed to lose money and a lot of sleep in the effort.

Take a look at this post which was one of the very first ones I put up on this blog when I started blogging five years ago.

I don't think the trades I post on this blog will give a useful edge to amateur speculators. There are just too many ways that you can muck up your results because of emotional reactions to market movements and to the losses and (yes !) to the profits that will occur. If you have little experience speculating you should NOT be risking real money by following the trades I post on this blog.


John said...

Good advice...

Win said...

You the man, Carl. Really. If you ever decide to run for public office, let me know. I will canvass for you.

RBharol said...

Great post...
I Ordered your book Carl.

How much has Gut feel to do with speculating? Say if somebody has good intuition/sixth sense, will that be an edge over others?

tellzhang said...

Thanks, great advice! But thank you forsharing your trading infomation in real time on this blog!

I am novice on trading, current I a reading your book as well as building my media dairy. I also read Mark Hulbert as one of the resouces...thank you for writiing such wonderful trading book!

Tony Zhang

janet said...

Ok, I'll take that fatherly advice and stick to what I do best. Thanks

George said...

I'm glad you posted this, Carl. I had been considering asking you what your opinion was on this exact issue.

Nick said...


In Theory; Carl's trades beat the market + I follow Carl's trades = I beat the market.

This theory only holds true if Carl continues to post his trades, Carl continues to beat the market, The time between the trade and the post and your trade the price remains flat, you don't allow fear to force you to sell while Carl remains in the trade, and the internet doesn't go down on your end, Carl's, or the website.

It is interesting how Mr.Futia has a group of followers determined to not follow the group. It's like having a group meeting on being a loner.


RBharol said...

Carl, Right now every body including Elliott wavers, You and some others are calling a drop in markets from here.... Don't you think every body is on one side of the trade..

catherine said...

There are some real horror stories out there - students betting on money borrowed on credit cards and being offered 400:1 leverage. Internet coaching cons costing several thousands, dreams of turning $1000 into $100,000 in a few months and many more. As the economic recession hits, it is again worse.

Just take this fact - in the UK where you can spreadbet on anything 24 hours a day with spreads smaller than you would find in the professional interbank market at times, it is all TAX FREE - all - however much you make. And you know why - not from the goodness of the governments heart but because if it is tax free, it also means you cannot offset losses - and guess what - 93% of all people who spreadbet lose money.

It is NOT easy. It looks deceptively easy, only because it is a binary decision - either up or down.

Try to breakeven or make 10% in your first year. Great hedge funds who make 15% on average for multiple years are considered good. Why aim to make x thousand percent?

But unfortunately no one listens and most have to learn the hard way.

I risk about 5% of my capital at the begining of the year - and if I lose it, I consider it a MAJOR disaster and generally take some time off - and yes, you need lots of capital and you absolutely should not rely on it for an income because markets do not produce steady incomes. The only people who make those are the people selling the subscriptions.

kcounty said...

i wonder if carl has legal worries for his market posts? how can you post market speculation with titles such as 'reaction immenent' and not expect people to follow along?

in fact, isnt that the whole reason to blog? Actually, all those making money in this market, are guys like carl who published BOOKS!!

Kishore said...

Carl says, "You are almost guaranteed to lose money and a lot of sleep in the effort."

Carl, how else will they learn? As they say, experience is the best teacher!

Kevin said...

RB, It seems that the side u are referring to is the BULLISH side. The slant is to the Bullish side right now. That is why the Market continues to climb on low volume...lack of sellers. Once the sellers kick in, in my opinion is when the needed pullback will occur.

TG4TA.stockman said...

Thank you, Carl.

There are a lot of radio shows out there who DO NOT offer such advice. They say things like "I see this stock going to $X", but never explain that (1) they are not oracles or (2) when to get out when the trade goes against you.

People get sucked in and lose THOUSANDS. I know because I used to be one of the uninformed novices.

Do not trade someone else's system unless you understand ALL of it.
So...learn a system on your own, and stick to it if it works. If not, learn a different system or tweak your initial one.

pimaCanyon said...

Great post, Carl.

I've often wondered whether the Should You Speculate link that you have right there on your blog on the right sidebar should be at the top in blinking neon green letters!

Okay, maybe that would be overkill. Maybe. But I would bet that many folks who read your blog for weeks or longer, never bother to click on that link.

Jack said...


Excellent Advice

Keyword: Deliberate Practice!

Here is my advice: If you are a novice... Practice, Practice, Practice, Practice,Practice, Not for weeks or months but for at least a year or more! Virtual Trading Acct. Not Real Money!!!

and not just any practice... Deliberate Practice! Specific practice that you can duplicate over and over and over again.

Once you can do it successfully on every practice trade (IE. 30 in a row)... then you may want to try to use real money.

Don Greenup said...

Your a class act. Bought a book think will buy another for my friend that needs it lol


janet said...

These futures that are traded are extremely volatile is my take..and that alone does not fit my personality. Great advice from many. I do make money with what I know how to do best and that has come from many years of learning and reading and studying and yes getting my little fingers burned. Thanks, Carl Have a great weekend all!!

pimaCanyon said...

What Jack said!

Most online brokers will give you a "play money" account you can use to trade in. Very useful for learning chart setups, how to place trades, how to set stops, OCO orders, how to exit the trade, etc.

The one thing that a play money account cannot do is give you experience with the emotional side of trading. That will happen only when you own real money is on the line. I believe this is the most difficult part of trading to master.

So trade away with play money until you're comfortable with all the technical aspects of trading. Then when you're ready to put real money on the line, start with risking small amounts, whatever you can be comfortable with.

Oh, and one more thing: Trading may not be for everyone. Longer term investing may be a better fit for you. If so, Carl's book is an excellent place to start.

Online Trading Graphs said...

Excellent advice! I just launched my new trading blog and added your blog's feed to my reader to keep up with your news. I'll be checking back quite often.


Joseph said...

What do you folks think about trend s/w... like Vector Vest. Does this stuff actually work. I assume it does, sort of if the trend is clear...up/dn.


janet said... works if your making money if your not then it's not working. That is the bottom line.

Rick Sommer said...

Don't follow your advice? Don't learn from your posts? Then why bother blogging?

Market Karma said...

All,, the point of a good trading blog is not to be dependent upon the trades illustrated but more so to learn the approach of the professional trader / blogger. By following Carl's trades and analysis, one would hopefully be able to decide if 1) carl's approach is suitable for your risk tolerance, profit objectives, and realistic attention required and 2) if 1) is true then be able to apply this approach on your own without following carl's blog. THAT should be the goal of trading blog followers, to learn how to trade independently! MK

RickyBobby said...

You wil learn NOTHING!!!! trading with play money. Losing money is one of the most important aspects of becoming a good trader after determining methodology. Ofcourse finding the right methodology is a labor of intense market study and observation of and by itself, which most will never get a grasp on in the first place. Then comes emotional management. And emotions can ONLY be dealt with and managed with experience when you shoot REAL bullets with real bullets of return fire!!!!!!

Kishore said...

Personally speaking, when my account was doing well, I could do no wrong. Then, it was all wrong. As the account was close to getting busted, I became very careful. We must finish our learning BEFORE the account gets busted!