Ebook exerpt

Most people in the United States live from paycheck to paycheck, approx 80% of us. In one sense, that is almost equal to slavery. We are chained to our job that we most likely do not enjoy. We like to eat, and we need a roof over our head. Having heat and electricity is nice too. Every day its up out of bed and to the grind. We come home tired, only have a few hours to ourselves in the evening and we crash only to get up and do it again the next day. Lets take a look at that. Not only are we working the 8-10 hrs a day, but there is additional time that we spend that supports the working lifestyle. Lets say your hours are 8am
to 5pm. (There was a time 20 years ago your hours would have been 9-5. Then employers decided that they didnt want to pay for lunch. So they now have people come in an hour early and the lunch hour you get is now unpaid.) You wake up at 5:45 to take a shower and eat, dress, etc so that you can be out the door at 7am so that you can make it to work at 8am. At 5pm the commute takes most people an hour or so and they get home at 6:15, that is if they didnt work late on a project. Then the night goes really fast. Dinner, time with the kids etc, maybe some TV. If you REALLY wanted to be sharp the next day because you have to get up at 5:45 you would be in bed at 9pm. But hey, you think. "Im not a robot, right? I have a life". You arent gonna come in the door at 615- 6:30 and only have 2 1/2 hours to yourself and then get
right in bed again. Thats no life. You have things to do. Your time to yourself to have fun, think, watch tv, hobbies. Your spouse or your kids. If you were going to do that, you might as well have a cot at work so you can sleep there. No, so you stay up till midnight and only get 5 1/2 hours of sleep and are dead tired the next day. Ive done it. My friends have done it. A lot of America does it. And a lot of America is dragging ass in the morning. Why do you think Starbucks has done so well over the last decade or two? So what it comes down to is that in reality you are spending 12 hours a day on work related activities that support your 8-9 hour day at the office, and this includes getting ready for work and travel to and from the office. This doesnt leave us with too much time for ourselves.

But what if we could open up our time? We would then be self sufficient from only working a
few hours of day by trading in the stock market?
How about this? You wake up at 7:30, stay in your bathrobe and make a cup of coffee. You sit
down at your computer at 7:45 and check the premarkets. You flip on Bloomberg and Fox
Financial and take in the news of the day, which can affect and override technical indicators. For
the most part your decision on which way the market is going was made last night, but you keep
an eye out for any variances.You are on the phone with a few of your friends. One also trades for
a living at his house, and two others keep watch at the office where they work, with
cbsmarketwatch.com up. You guys compare notes. Two heads is better than one, especially if
one of your friends constantly makes a killing in the market. For the most part you just watch in
the morning, prepared to defend your investments if anything were to suddenly turn. You might
step out for lunch, get something to eat at Panera Bread, do some shopping. You are back at the
computer at 1:30 and check the financial news channels for any new developments. The pros
come out in the afternoon with their trading. This is when you want to really keep an eye out for
any actions you might undertake in your writing of options, or buying them back, or moving a
block of stock from one of your 6 piles. Or if you are still in Part one of the system you are
looking for setups for the next day. 3 o clock! Market close. Another 1-2 thousand dollar day.
Nice. Now you are already at home and free to do whatever it is you want to do. Maybe go to
that Mercedes dealership and maybe buy that car you have your eye on? Sure beats when you
used to make 45,000 dollars a year as an IT guy sitting in a cubicle with a name tag. Ever see the
movie "Office Space"? If you ha vent seen that 1997 classic yet, go see it and you'll recognize
everything in it as a goof on life living in a cubicle.
This system that I developed is going to take some risk. While you will win 70% of the time
using this system, there is a possibility of loss. Do not quit your job until you have this goin for
about a year or two and you are comfortable with it. And another thing about making money.
Scared money never wins in the long term. Gamblers will tell you this as well as people in the
stock market. Say you are working your job at the office and you suddenly get a 5,000 dollar
bonus. You are thumbing that check and thinking of all the things that you are behind on..bills,
some home improvements you need done, and your car needs maintenance, maybe you even
have to purchase a new car..you could even use that as a down payment. You wanted to start in
the stock market, but damn..you really need that money. Hmmm. You think about putting it in the
market and you are really scared. What if you lose it? You coulda used that for other things you
really needed. You hold the check for a bit more, looking at it, conflicted.You decide that you
will deposit it in a online trading account but you will be really careful on how you invest with it.
You put it in your account and it registers as available 2 days later. Instantly if you wired it in via
your bank. Now you are waiting for a good safe opportunity to come along. You pass on a few
things that could have worked because you cant lose that money. Kinda shy on that mouse
trigger. Finally a week or two later something comes up that you finally commit to. Then two
days later the market has a sudden shake up and in the morning you see that the markets are way
down. HOLY SHIT..OMG you think and with a nauseating feel you pull up your account and see
that its dropped 20%. No. No. You cant lose that money. The house. The car. Bills. You get on
with your online account and panic sell. You just lost 1,000 dollars plus commissions.
.
Lets review what went wrong in the above paragraph. 1. You used money you couldnt afford to
use or lose. Basic bills, house upkeep, transportation, rent, food, anything that involves survival,
shelter, bills, heat, electricity comes first. 2. Seeing that it was money that you couldnt afford to
lose, you traded with a definite style that involved fear and therefore this put you at a SEVERE
handicap. Trading with fear leads to loss because when you trade with a fear type survival
mentality you will trade along with the herd and lose along with 90% of the traders. Contrarians,
which I will cover in the next section, are usually among the top 10% of all traders. They swim
upstream and as such make all the profit. Lets look at the previous example how a contrarian
would have handled it. He would have waited where the market had made an emotional
overreaction. Right then, at that point, he would move in with his funds knowing that within 2
days or so the market would snap back after people woke up from their emotional overreaction.
Then he would have sold with a profit. Or more to the point with my story example above, when
the market lost 20% that day in the morning, the contrarian would not have sold, he would have
held his position. (Depending of course on the news. I will get into that as well.) If he thought
that the 20% loss on his stock was news driven from the sector he was in or the market as a
whole and nothing to do with his stock he was in HE WOULD NOT SELL< INSTEAD HE
WOULD BUY MORE>. This magnifies the contrarians profits when the market swings back the
other way again. Reacting with fear leads to loss. Reacting in a measured way with confidence
leads to gain.
This may seem nuts, but you have to trade with money that you can otherwise stack on a pile and
light on fire. This means that all your glaring immediate needs have already been met. If you
have to fix something in the house, or your mortgage payment is too high, or your car needs
maintenance, brakes, engine, etc, or your wife needs a new car or you need to do that room
addition because the baby is on the way, or you owe a lot of money on your credit cards where
the monthly payment is a bit high, you need to use the money for these things first. Or you are
going to trade all wrong. Proper mental attitude of risk is mandatory.
This is tough to weather emotionally. Imagine there are some guns shots in a theater. People all
of a sudden jump and as a whole like a herd of antelope all run the same way at the same time
out the door. Herd mentality is hardwired into our brains as humans as an actual survival
mechanism. Most of the time in history the crowd is usually right. If everyone started running,
chances are there was a predator coming and it was a good idea to not ask questions and join
them. But now in today's trading age, this will actually cause financial loss to go along with
everybody. The crowd is usually almost always wrong. As a matter of fact while I am on the
subject, look at all the financial talking heads on cable TV. They are almost always wrong. As
are the mutual fund managers taking losses for their funds over the last 8 years. In order to make
money trading, you have to trade like a contrarian. Imagine when everyone is running out of the
theater when shots where fired and during this you are running back in. That's Contrarian. And
its tough. Its a tough solitary disciplined road but its the road to cash.
Ever wonder who wins in the stock market? It sure doesn't seem like you or anyone that you
know directly. But you do know that there is a group of people who win.

This segment of my ebook will be continued tomorrow....
until then,

Tradinginsider