Kelvin Chan asked:


I’ve often wondered long and hard what it took to succeed when I first started out and had only a few clues as to how. I didn’t quite understand then what the professionals meant when they said a successful trader has to have a certain psychology, rules on risk management and also knows their how-what-when-why-where concepts on entering and exiting a trade.

And it so happened that after trading for about 2 years, I begin to realize and know these concepts on many more levels and not just on the intellectual one. It’s my desire to share these with both seasoned and new traders alike.

In what I term the M.R.S Trader, we will have an in-depth look at the mindset, risk management and also strategies that the trader has (in that sequence as well). They are the 3 pillars of success in trading.

(M)indset

Without a doubt, this is absolutely the most important element out of the 3 that we will cover (not belittling the other 2 in the process). Many processes in life require that we get our mindset/psychology on the right track and trading is not an exception.

As a start, we have to tackle the truth and you have to ask yourself this honest question …. “Why do I trade?”

It’s amazing really but many people who trade are not really in for the profits (although they think they are). There’s usually a myriad of reasons but one of the more common ones is that they’re trading for the excitement of it.

I remember some time ago I was chatting with a friend and the conversation went like this:

me: I’ll stay out for now. don’t rush into a trade

friend: i know it

friend: i prefer trading when the situation is rushed, it blows up my adrenaline

me: not good.

me: are you trading for profit or for excitement?

me: Casinos provide more entertainment

someone: hehehe …

My point is that if you are not trading primarily for monetary gains, then you shouldn’t be trading at all.

Having said that, it’s my opinion that we humans can be pretty irrational creatures (note: traders are humans too) and as such, we have to watch out for irrational behavior especially during trading as it can work against us pretty badly.

When you start out trading, you should never expect yourself to succeed in a short time (e.g. such as under 6 months). This is not only unrealistic but places totally unnecessary pressure and stress on you.

I like to quote what Gary Player (a golf legend) once said. He said “The harder you work, the luckier you get”.

I interpreted that to mean that the odds of success increases in tandem with the amount of effort one puts in. But do not be mistaken here … I do not think that hard work guarantees you being successful in trading as this is a totally different ball game altogether from most of the mainstream careers.

Still, one should persevere and keep the faith and commit to having success in whatever field he or she chooses (and in this case, trading).

At this juncture, I would also like to address an issue that concerns new traders and that is the idea of demo trading. Many would presumably start off (told or otherwise) demo or paper trading by using virtual / demo money and that is perfectly fine until you realize that most of us will never benefit fully from it because real money isn’t involved and as such, there is no emotion at all. When that happens, it isn’t real live TRAINING. In my view, it’s simply a waste of time for the majority.

I can sense many people disagreeing at this point. However, I’m obliged to share with you what works and it is in my experience that I found what worked for me and what did not.

The question then to answer (if you choose to agree with me) is “How can one learn to trade without risking a great deal?” and what follows is simply my suggestion.

I would suggest using XXX amount of dollars where it wouldn’t cost you to sacrifice the way you live (should you lose it all) yet large enough so that you can actually experience the emotions while trading and take it more seriously. What say you? You might as well consider that as paying for live training/tuition to the market.

With that said, once you start trading proper, you should never focus on how much you would make or what you could buy with the money you make. Instead, you should FOCUS solely on your profitable trade setups and trading them well. The profits are simply an afterthought, a given. It WILL come eventually so long as you trade well.

(R)isk Management

Now that we got mindset out of our way, let’s talk about risk management. Some call it money management, others call it trade management. I choose to call it risk management because I see managing risk in trading as something very core and very essential.

First things first, traders have to decide how much risk or drawdown as a percentage of the entire equity they are willing to take in a given period (be it a day, a week or a month). As a guideline, it can range from 2% right up to 10% and more. I personally use 5% as my line in the sand.

Breaking it down further, you have to decide how much risk you are willing to take per trade (this relates back to max drawdown in a month and the typical number of trades taken in that time). Also, risk tolerance is dependant on the style of your trading. You have to discern if you are a positional trader or an intraday one. Positional traders will allow for a bigger move against his entry by trading a smaller size. Conversely, intraday traders can only afford a relatively smaller move against his position if the trade taken is a bigger one as compared to the one taken by the positional trader.

Another factor to take into account is the trader’s typical setup. If his setup requires only a small stop, he can choose to put on a bigger trade as compared to another setup that requires twice the stop of the former setup.

So what can a proper and well thought out risk management plan achieve for the trader and his account?

For starters, the trader has a plan that he knows that if he breaks it, he will have a much harder time growing equity. Suppose a trader loses 50% of his account in a given month. Mathematically, he needs to make 100% on his remaining equity just to get back to where he started off in the month where he wiped 50% from his account. Does this make sense?

With proper risk management, an account can grow very quickly if the trader trades profitably. On the other hand, the balance on the account will dwindle more slowly if the trader experiences bad spells or streaks. This is true only and only if the trader trades in the size proportionate to the total equity or balance.

As a final point in risk management (and most would miss out on this I reckon), you should also think about the possibility that your internet connection might go down at any point in time while trading. And as such, I use 2 precautionary measures.

The first one would be to put in my profit target and stop loss per individual trade. And last but not least, to write down your broker’s telephone number somewhere next to your trading desk so that you can call in to change your orders.

(S)trategy

Finally, we come to the last letter of M.R.S which incidentally stands for strategy. Strategy is all about finding your edge and applying it to the markets. It is about finding setups that create your buy/long/call bias and your sell/short/put bias.

It’s a paradox really because most beginners focus way too much on strategies rather than having the right trading mindset and having a proper risk management plan. It’s no wonder that in a recent trip to a major bookstore (if you need to know … it’s Borders), I couldn’t help but notice that most books on trading are focused on technical analysis, strategies and trading setups rather than giving a balanced view and write-up on the 3 components that are very essential for successful trading. So much for giving these books with titles such as “How to be a profitable trader”!

Moving on … let’s discuss trade entries. Amateurs armed even with a profitable edge usually end up negative because more often than not, they tend to be wishy-washy with their entries (because of greed/fear).

Professionals on the other hand tend to be strict with their entries. They do not compromise with price. They essentially plan and wait for price levels to fall into their trap before entering into a trade. They aren’t afraid of missing out on a trade as such because they know that another opportunity is just around the corner. May I remind you that patience is key!

As a natural sequence, we will now look at setting profit targets for trades. Primarily, there are 2 methods as I see it. You can either use a technical target (based off indicators, etc) or use an arbitrary number away from your entry as your target objective. Some would argue it doesn’t make sense to use an arbitrary target because we would be limiting our gains but hey … why do you care if you are consistently hitting your arbitrary targets every other day. In any case, it is horses for courses and as such, choose whatever works for you.

I remember the time when my trading improved dramatically and it basically boiled down to a routine I started practicing. And it’s none other than trade journaling.

In trade journaling, one records details of a trade. In my case, I record the price at which I entered and exited, the date of the trade, size of trade, the net result, the session at which I enter and exit my trade and most importantly, the rationale behind the trade.

If you like and can afford more time (especially when you are just starting out), you can also grab a screenshot of your trade, record your stop loss point, etc. It’s basically a case where you record details that are important to you when you refer back to your trades and learn from them

Hey, if you haven’t been journaling your trades, I challenge and invite you now to start doing so. I promise it will improve your trading as a whole. Trade journaling will change you internally. It will propel you to new levels in your evolution as a trader. If you like to, you are welcome to email me and let me know how journaling has changed the way you traded before.

Summary

I’ll like you to just bear in mind that successful trading is like the wheel with 3 spokes (think of Mercedes Benz). You simply cannot do with deficiency of development in any one of them.

Put it this way … someone with the best strategies and setups in the world wouldn’t make money if his emotions run him riot and if he over-leverages on his position. Prove me wrong if you can.

As I bring this article to a close, any wonder why female traders tend to trade better than their male counterparts. (Think M.R.S …)

Till we meet again, stay healthy and pip-wealthy!



Joel

Better Trades asked:


BetterTrades™ is the solution to your trading problems. If you have any questions about trading or any doubt that you have the knowledge necessary to compete in today’s trading world, BetterTrades™ is the place to turn for helpful classes and useful advice as well as articles and workshops that will allow you to improve your trading strategies and techniques.

Everyone would love to be able to make money on the stock market, and whether your ambition is to learn about trading for your own personal gain or to work toward becoming a professional trader, BetterTrades can help you turn your goal into a reality. BetterTrades has already helped hundreds of people learn more about trading, giving them the details and the inside information to become stronger, more successful traders.

If you would like to join this educational experience, all you have to do is sign up. The registration process for BetterTrades is fast and easy, and it grants you instant access to the multitude of topics and resources on BetterTrades. With your free registration, you will be able to sign up for online interactive classes hosted by a team of professional trading educators, work with our comprehensive article database, or register for one of our live events.

BetterTrades can be your virtual classroom; with some of the top trading instructors working to create classes that will interest, educate, and inspire you, you can participate in a trading education like no other. Work with some of the top names in trading today, and get experience from the professionals who have been on the trading floor and have published books to back up their techniques and skill in the industry. The BetterTrades virtual classes allow you to experience the give and take of a traditional classroom from the convenience of home with their online education programs.

Taking a Better Trades class is as easy as signing up, and signing on for the class session. You will be able to communicate with your instructor, ask questions, and refine your knowledge of the topic at hand. With BetterTrades, it is easy to work with the system to pick the classes that are interesting to you so that you can get the information you need to trade at your best. Consider starting with our Marketing Essentials course, an amazing overview to help get you off on the right foot.

BetterTrades is more than a virtual classroom environment, though. For those who prefer a more traditional setting, Better Trades offers live workshops with some of the best minds in trading education to walk you through a wide range of fascinating topics; these classes are constantly offered in major metro areas around the country, and they’re the perfect way to kick off your educational experience. BetterTrades is the trading education you’ve been searching for. Sign up today.

This article is originally published here: Better Trades



Barbara

Nick Johnson asked:


It typically requires a patent attorney to define all the nuances between trade secrets, patents, and trademarks, however a few basics don’t require a patent attorney for a generic understanding.

Patent infringement is considered an infringement on a product, or a product enhancement that is patented to an existing inventor or company. For a period nearing twenty years, an inventor or company can hold exclusive rights to a patent, and anyone who markets or presents a product that can only reasonably used for the same purpose is guilty of patent infringement.

A trade secret is typically regarded as a company secret that makes the product different from any other, often this refers to an ingredient such as what makes Corn Pops taste like Corn Pops instead of Corn Crunchies.

A patent attorney may be called in to draw up contracts with employees to keep trade secrets safe, as well as prosecute any trade secret infringements once an employee has left a company. It is illegal for an employee or anyone else privy to trade secrets to open up their own company using the trade secrets they learned while working for another company.

A trademark is typically an emblem, logo design, or other distinguishable characteristic that is easily recognizable as a company’s trademark. A trademark can be the way a name is or brand id displayed, like Coca Cola’s emblem placed up the can or across the bottle.

Trade secrets, trademarks, and patents can all be subject to patent infringement laws, and while these laws are typically complicated enough to require a patent attorney to interpret them, the basis of these laws simply means that nobody is permitted to copy these things without permission.

When trade secrets or trademarks are copied, a patent attorney is usually contacted to assist the defrauded company in determining and prosecuting the offender, as the selling or theft of trade secrets or the copying of trademarks can sufficiently hurt the established company’s business.

Many companies rely on their trade secrets and trademarks to establish something special in the marketplace, and being defrauded means that the consumer is now likely to interpret the trademark or purchase the other brand, believing it is the same product.

When this is not true, the consumer may lose confidence in the defrauded company when the product is not the same as expected. The defrauded company has no way of explaining to the consumer that this product was not theirs without retaining a patent attorney to file a patent infringement lawsuit based on either the theft or sale of trade secrets, or the copying of a trademark.

Once a patent attorney is able to bring the case to court and expose the damage done, the consumer by then has already found either another product or may be leery of wasting money on a product that turns out to be less or even just different than what they expected.

A patent attorney can often be brought on board a project in order to help prevent the infringement of trade secrets and trademarks, and of course patents. This is routinely done in the development stage in order to prevent the company from wasting money and energy on a product or product enhancement that is already covered and protected under patent infringement laws, which includes trade secrets and trademarks.

Patent infringement covers all aspects of business practices that include things such as trademarks and trade secrets. Patent attorneys are able to keep up on the changing laws, which is often invaluable in the development of a new product.

No company wants to spend man hours and money in the development of a product or product enhancement that is like to find them on the receiving end of a patent attorney’s line of questioning. Considering the ample awards that are handed out for patent infringements, it makes financial sense to bring a patent attorney on board to justify the product development.

Naturally, patent infringement is taken very seriously in business law, and the penalties for either a patent infringement, trade secret violation, or a trademark infringement are quite severe. This is just one motivating factor in seeking assistance from a patent attorney before marketing a new product or product enhancement.

In today’s business world, an ounce of prevention is worth about 2.3 million dollars worth of cure. The vast majority of companies simply skip the guess work and retain a patent attorney from the start, and by doing so, thwart their chances of accidentally being guilty of patent infringement, trademark violations, or trade secret violations.



Justin

Khalid Hussain asked:


Hunger has many faces. It can be temporary or chronic. It can mean caloric inadequacy or nutrient deficiency. It can be rooted in failed governments or poorly performing markets. It can be lessening, as in Asia, or worsening, as in Africa. And so on. The essential point, however, is that ending hunger requires both the alleviation of specific problems and the eradication of its root cause, poverty. Aid is well-suited for relieving temporary deprivation through emergency assistance. It also can correct nutrient deficiencies through fortification. It often is a necessary response to dislocations from civil unrest, stagnant economies or natural disasters, as Hurricane Katrina so vividly illustrated. Aid is not well-suited for redressing chronic hunger or caloric deficits as donors will weary of it. Moreover, free food displaces commercial production and development. Aid also does not help well-functioning markets get established and grow. And, it can be disruptive to self-sustaining growth where hunger is declining. On the other hand, trade is ill-suited for emergencies, which by their nature reflect a breakdown in normal communications and commerce. It also is ineffective in serving populations that lack the means to help themselves, whether they are infants and children or the abject poor. Trade works best in jumpstarting economic development, creating wider markets for local production and increasing the reliability of supplies. Too many believe that developing countries have nothing to contribute to liberalization and little to gain from their own reforms. Nothing could be further from the truth. While the average U.S. agricultural tariff under the WTO is 12 percent, it is over 30 percent in the EU, over 50 percent in Japan, 66 percent in Korea and more than 110 percent in India. The world average is more than five times the U.S. level.

According to recent World Bank study we underline the need for mutual reductions in trade distortions:

• Comprehensive global trade reform would increase global welfare by nearly $300 billion per year;

• Developing countries stand to capture 45 percent of this gain;

• Agricultural trade reform accounts for roughly two-thirds of the welfare gain for developing countries, or about $100 billion; and

Market access reforms by developing countries increase their own welfare; they also will help prompt the developed-country reforms poor countries seek. It is a potential win-win for them. Developing countries should not be resisting market access concessions. Rather, they should exchange them for what they can gain in both trade and aid from agreeing to the reforms they need to make to accelerate their own development.



Larry

Kelly Price asked:


If you want to get the right forex education and trade like a pro in just 2 weeks, then this article is for you. I was inspired by the story enclosed and it will inspire you too…

Let’s look at the story first and it will make you think.

Novice to Pro Millionaire Traders in 2 Weeks!

Richard Dennis was a famous trader who set out to prove that anyone could learn to trade and he set about proving it in 2 weeks.

He got a group of people together, who had never traded before and they were a diverse group. They ranged from an actor, to a security guard SO, just ordinary Joe’s. he taught them to trade in 14 days, gave them money and trading accounts and they rewarded him – by making $100 million in just 4 years!

Now this might strike you as a bit of a paradox, as 95% of forex traders lose!

The reason is not because they can’t learn, it’s because they learn the wrong information, want to follow others, or have the wrong mindset.

Today how many traders start trading without really understanding how markets work? – The bulk of them.

You Need Confidence and Discipline to Win

Most traders want to follow forex robots that haven’t even been traded, or follow a guru or mentor. Their lazy and wont take responsibility for their actions and lose.

Taking Control of Your Destiny

Dennis knew that he could give them the system – but he knew they would get nowhere with it, unless they understood it and had confidence in it.

Only if they understood it and had confidence would they have the discipline to follow it, through losing periods until they hit a home run.

You Don’t Need to Work Hard You Need to Work Smart!

If you want to learn to trade forex and win you don’t need to work hard, you need to work smart.

That means a few weeks study – forget all the rubbish said about you have to keep learning – you don’t!

Once you have your system, your then down to 30 minutes a day work and that’s it.

You Don’t Need to be Clever to Win Either

In forex trading there is no correlation between how much effort you put in and how much money you make – you get rewarded for being right and that’s it.

The next point to keep in mind is you don’t need to be clever.

The simpler a system is, the more robust it will be and the more likely it is to be successful.

The group Dennis taught were given a simple, long term trend following system, based on breakouts and this is always a good place for any novice to start.

Base your forex trading system on breakout methodology and focus on the long term trends. We have written on how to put together a system based on this methodology in our other articles so look them up.

Forget complicated systems they break and you need to keep it simple just a few rules and parameters is all you need.

The Hard Part!

The hard part as we said earlier is being disciplined. It sounds easy – but it’s not, as you have to keep on track while the market hands you losses and makes you look a fool and it’s hard even for experienced traders sometimes.

If you have built your system, understand how and why it works, discipline will be easier for you to achieve.

Now I am not saying you will get as rich as the group Dennis taught – but the opportunity is there, for anyone to learn forex trading and become a winner.

Sure it a challenge and sure you have to accept success sits on your shoulders but if you want success, the door is open for you.

Remember the market doesn’t beat the trader, the trader beats himself. So have confidence and a burning desire to succeed and you can enjoy currency trading success.



Aaron

Mark Timmis asked:


As more and more companies are seeking to distinguish their products and services in the marketplace by registering their names, slogans or designs as trade-marks, many companies which do not retain a Canadian lawyer or trade-mark agent often make fundamental mistakes.  Among the most common mistakes are the following.

1.    A Company Name is not a Trade-mark.

A company name is the legal name under which a company carries on business.  However, unless the company name is used as a trade-mark, it cannot be registered under the Canadian Trade-marks Act.  For example:

•    Acme Insurance Ltd. markets life insurance under “Goodlife Insurance”.  “Acme Insurance Ltd.” is the company name, “GoodLife Insurance” the trade-mark.  “Acme Insurance Ltd.” is not used as a trade-mark, “GoodLife Insurance” is.

•    Acme Insurance Ltd. markets life insurance under “Acme Life”.  “Acme” is part of its company name, but it is also used as a trade-mark to distinguish its insurance policies from those of other insurance providers. 

The important point here is that the registration of a company and the registration a trade-mark are two distinct processes.  Federal and provincial company offices do not search the Trade-marks Office database to determine if a proposed company name is a registered trade-mark; nor does the Trade-marks Office search federal and provincial company offices to determine if a proposed trade-mark is registered as a company name.  The two processes are unrelated, and the trade-mark must be registered separately.

2.    There’s no Requirement to use a Trade-mark before Registering.

Many companies believe that they must commence use of their trade-mark before registering it.  In Canada, as in many other countries, trade-marks may be filed on the basis of “intention to use”.  An application which is filed on this basis must specify the products and services that the company intends to use in association with the trade-mark.  Once the application has been filed, the company generally has three (3) years from the date of filing to file a Declaration of Use confirming the use of the trade-mark in association with the specified wares and services.  The Declaration of Use may be filed anytime within the three (3) year period, but must not include any products and services that have not been used in association with the trade-mark.     

3.    Search before Using a Trade-mark.

It is always advisable to conduct a trade-mark search before commencing use of a trade-mark.  This will ensure that the trade-mark does not infringe another trade-mark and will avoid the wasted expense of such things as advertising and labeling.  

A trade-mark search may be conducted through the Canadian Intellectual Property Office Trade-marks database by inserting the trade-mark in the search text box and selecting the appropriate search field.  If the search does not reveal an exact match, a secondary search should be conducted based on such factors as the elements of the trade-mark (where, for example, the trade-mark comprises more than one word), different spellings of the word(s) comprising the trade-mark and the sound of the trade-mark.  This is referred to as a “comprehensive search” and is advisable to ensure that the trade-mark is not confusing with a registered trade-mark and therefore unregistrable.

4.    Some Trade-marks are not Registrable. 

Not all trade-marks are registrable.  Among the trade-marks that are not registrable under the Canadian Trade-marks Act are:

•    trade-marks that are clearly descriptive of the character or quality of the products or services,

•    trade-marks that are deceptively misdescriptive of the character or quality of the products or services,

•    trade-marks that are clearly descriptive or deceptively misdescriptive of the origin of the products or services,

•    trade-marks that are the name of the products or services, and

•    trade-marks that are confusing with a registered trade-mark.

There are a number of tests which have been developed by the courts which are employed by the Trade-marks Office in determining whether a trade-mark is registrable.  In general terms, however, where an application for registration of a trade-mark falls within one of these categories, the trade-mark will not be registrable.

5.    International Classifications Don’t Apply. 

Products and services which are used in association with a trade-mark must be described in ordinary commercial terms.  In many countries such as the United States this is done by using International Trade-mark Classes.  The International Trade-mark Classes are categorized into 45 classes, Classes 1-34 relating to products and Classes 35-45 to services.  Canada does not use this system and therefore trade-marks must be described in ordinary commercial terms for Canadian filing purposes.

For example, Class 32 refers to “light beverages” which are enumerated as: “beers; mineral and aerated waters and other non-alcoholic drinks; fruit drinks and fruit juices; syrups and other preparations for making beverages”.  For Canadian filing purposes, the wares “non-alcoholic beverages” require further specification, for example carbonated drinks, colas, energy drinks, sports drinks, drinking water, fruit-based soft drinks, fruit juices, hot chocolate, milk, non-dairy soy,  coffee or tea.

6.    Copyright may reside in Trade-marks and must be Acquired.

Where a trade-mark is in the form of a design, the design will be subject to copyright protection, as well as trade-mark protection.  If a trade-mark owner retains a graphic artist to develop and design a trade-mark, the trade-mark owner should obtain all rights to the design, including the ability to make changes to the design.  This is generally done by means of a simple contract known as an “Assignment”.

In Canada, copyright need not be registered as rights to the design arise at the time of creation, which provides the copyright owner with remedies for copyright infringement at common law. These remedies are additional to the remedies that the trade-mark owner will have under the Canadian Trade-marks Act.



Curtis

Marcus Robbins asked:


It is easy to envy the owner who traded away Brady before the season started or the owner who ended up with a backfield of Marshawn Lynch and Brian Westbrook through some well timed trades.  It’s not easy to be that owner.  Trading is a tough game of chess, we all want to sacrifice our pawn for a queen but the moves aren’t so obvious.  The golden rule of trading is information. The more information you have the better deal you will get.

Well what kind of information do I need Gujupike? Here are the questions that should be answered before you accept or offer any trade. The three most obvious questions, which I will NOT address, are: where does my team need improvement (you should know how to spot that), who has players that can improve my team (basic skill), and how can this trade be beneficial for me.  If you don’t know those three before going into trade than you are bound to get outclassed.

Master these next few steps and watch your ranking improve.

What does my opponent want for his player? It’s not so important what they need it is more important what they want! That is a key that many players forget. They offer up trades that are, by all means, fair trades and do improve both teams but if your opponent doesn’t believe in Kurt Warner, or is a Raiders fan and can’t stand Jay Cutler there is no point in offering that trade. You will not get the value you deserve. It is important to talk to your fellow owners. If you are in a league with people you know than talk football with them as much as you can. Don’t probe for information because they will notice that and mislead you. Just simply talk football. The most honest conversations will reveal the most information. Do not be afraid to give information to get it. Just make sure you get more information than you give.

Research Research, Research. For the players that you want and for the ones you are giving up know as much about them as possible. Know their schedule, their bye weeks, there strengths. As much research as you put into drafting player should be done into trading him away or trading for him. I wouldn’t say its important to know the nuances of each player but take a glance at their stat sheet. Here is what you are looking for: Did your player got most of his points from one game or was it evenly spread throughout the last two weeks? Example: Hank Baskett, a lot of owners mistakenly jumped all over him after week one because they saw that he had over 100 yards receiving and a touchdown. However, those owners failed to realize that 90 of his yards came on one play and those owners were severely punished on week 2. Also another player that can be deceiving is Santana Moss. He has over 200 yards receiving in two games but 146 came from one game. If a running back ran for 95 yards make sure it wasn’t one long run for 80 and then 10 runs for 15 yards. Know thy players Know thy opponent.

Don’t be afraid to move your blue chips. If the draft was in your favor and you made some good sleeper picks (Chris Johnson, Matt Forte, DeSean Jackson) don’t be surprised if you don’t get value for them. You have to trade the blue chips you drafted early (Brandon Marshall, Terrell Owens) in order to get some players. Your depth comes in handy because you can replace the blue chip you traded from your bench. For example in one of my leagues my quarterbacks were David Garrard and Matt Schaub so I obviously needed help. I traded Marshawn Lynch for Drew Brees and moved Matt Forte from the bench to my starting. I never expected to trade Forte for a quarterback. Too often I see owners trying to move two or three bench players for a blue chip. An opponent accepting a trade with your sleeper picks is the same as him admitting you made better moves than him in the draft, most don’t want to do that.  If you move a blue chip the way I explain below you will come out ahead and make him feel like he cheated you.

Expect to feel like you are overpaying. When you try to trade for a top ten player you will always feel like you are overpaying, even if said player is underachieving. A lot of owners are trying to pick up Braylon Edwards cheap and they are finding out that owners aren’t willing to trade him for Santana Moss. Don’t be surprised, it’s early in the season and they still remember which round they drafted their player in and want some value for him. Remember overachieving players will never garner you underachieving players. Stop trying to trade DeSean Jackson for TJ Houshmandzadeh, it’s not going to happen. “The Godfather” said it best; give them an offer they can’t refuse. Overpay if you have to, as long as your team improves overall that’s all that matters. If they refuse an offer that’s clearly in their favor then move on.

Don’t forget the negotiation part of trading. A lot of players play the spectrum of trading wrong. On one end there is the trade that the other owner will never accept and on the other, an offer you will never accept. You have to know these ends. If you offer a trade that is too one-sided in your favor they might feel insulted and not trade with you no matter the offer; or they might get upset and demand more value from you to prove their “intelligence”. However, it is necessary to not offer your best offer first. Propose a trade that is seemingly fair and slightly in your favor (again not too much) just enough to wet the appetite of the other owners so the trade talks can open. Once the trade talks open then keep wetting the appetite of the other owner and then be like well I don’t know and watch him squirm. At this point the other owner has imagined your blue chip player on his team and his mouth is watering. Now we can try to extract more information from him. The key is this, offer a non-blue chip player in your first offer. Trade talks move up not down. Know that you are willing to trade your blue chip player but not unless he asks. When you say “hey I want Drew Brees” he is going to say “well I want Brandon Marshall” and that’s when you’ve got your information. Too often I see and hear of trades that are fair and balanced getting rejected because it was the first offer on the table. Play the game right and you will win.

So keep in mind the subtleties of trading and remember trading is an important part of building a championship team but it’s not the only way to win. Picking up key players off the Waiver Wire is extremely important. The last few things I want to mention are timing issues. Maintaining cordial relations with owners is crucial for future practices, don’t berate players if they offer you one-sided trades just simply message them politely on who you are willing to give up and who you want.  Keep the communication open. Make sure you offer trades up early in the week, give time for negotiations to work, Sunday night is a great time to put up your first offer. If an owner doesn’t respond in a day or two take your offer down and move on. Before you offer or accept a trade read your starting lineup out loud to yourself with/without the traded players. Compare and contrast lineups before the trade and after. Also, don’t panic if you are 0-3. If you were the unlucky guy who drafted Brady, Braylon Edwards, TJ Housh, Larry Johnson, Chad Johnson (ocho cinco) all at once then maybe you should panic but if you only have one or two players underachieving, relax. Stars are stars for a reason they usually find a way to pull out decent stats. Remember trading is negotiation and negotiation is all about information and psychology. As Sun Tzu said in the “The Art of War” If you know thy opponent you need not fear the outcome of a thousand battles.



Mark

Andrew Daigle asked:


Derivatives of the Forex trading system are spot trading, futures trading, forwards trading, options trading and swap trades. Many inexperienced Forex traders tend to focus on spot trading. Spot transactions are over-the-counter transactions, handled outside of an organized exchange.

Spot Trading – Spot trading in the Forex trading system is what is termed Forex. A Forex currency trade is a simple simultaneous transaction that involves the exchange of one currency for another. Forex currency trades may be settled within 2 days, except in Canada where exchanges may be settled within one-day.

There are two parties and two positions with any trade. The party who delivers a commodity holds a short position. The party who receives the delivered commodity holds a long position. In other words, the seller holds the short position and the buyer holds the long position. There are no restrictions and limitations in Forex spot trading as long as there are parties willing to a trade and liquidity in the currencies being traded. Spot trades incur a transaction charge per trade called a margin or spread. A margin is calculated as the difference between the current bid price and the asking price.

Forwards Trading – A forwards trade is a trade in which the traded commodity has a date of delivery some time in the future. Typically, a forward contract may have a date of delivery one, two, three, six or twelve months into the future. Traders use forwards to take advantage of interest rate differences between countries and this difference is usually factored into the cost of a forwards trade. The value of a forward is determined by the difference in interest rates offered by the countries whose currency is involved in the trade. The cost of a forward may be higher or lower than the current spot price of a currency. When a higher price is charged for a forward, it is called a premium while a lower price is a discount.

Futures Trading – A futures trade is similar to a forward trade where a buyer and seller trade currencies for a predetermined price, at some time in the future. The difference between a futures and forward trade is that futures are traded on a regulated exchange and forwards are not. Futures trades incur round-turn commissions that are generally higher than the margins required for spot trading. You must make a deposit on futures to serve as a margin or bond for the trade. If market events indicate that a currency will increase in value over the term of a future, a lower price will have more worth when it is traded. The difference between the price for a future and the market price of currency is added or subtracted from the margin value. You must replenish any loss in margin in order to continue to hold a position in the trade.

Options Trading – Options are a form of currency trading where you are given the option to buy a specific amount of currency before a specified date. Options differ form forwards and futures because options give you the right to buy or not buy. Generally, traders will seek options when there is an indication of stability in currency exchange rates while speculators may assume the risk in hopes of making a profit. As a buyer, you are required to pay a premium for options and that premium is forfeited if you fail to exercise the option. Premium prices are established based upon how likely the market perceives that the option will be exercised. Premiums may be calculated as the difference between the current spot price and a future strike price or they may be involve more complex calculations, based on market conditions and the timeframe before the expiry date.

Options include both a call and a put. The right to buy currency is a call option while the right to sell currency is put option. The option to buy US dollars and sell Japanese yen, for example, is a yen call and dollar put. The price that the buyer agrees to pay is called the strike price or exercise price and the amount of currency that may be bought or sold is called the principal. Options may be purchased on an exchange or over-the-counter and then bought and resold. US style options are purchased on an exchange and have a strike price, expiry date and contract size. Options bought over-the-counter are bought in interbank. Options offered in the interbank market are usually European style options where the terms of the contract are negotiated between the seller and buyer.

Swaps – A swap is a combination of a spot and forwards trade. A swap involves the trade of currency on a specified date and an agreement to trade it back at a later date. A swap provides you with an alternative to borrowing foreign currency. If you need liquidity in a currency, you may swap for the needed currency. This involves a spot transaction to initiate a trade and a forward transaction to buy back the currency in the future. Large banks and corporations tend to favor swaps. Individual investors rarely engage in swaps.



Terry