I am writing this article in advance because everyone will be involved in OASIS 2008. Surely by the time this article is published, OASIS would be finished. Just to let you know, I am writing this article on May 31, 2008, but I think it is an appropriate time to assess my popularity in the discussion board. The board was launched a month ago and has 3,371 views from readers all over the world. So, if this number is annualized, it is more than 40,000 views a year, and hopefully this will put me to the upper band in terms of the popularity amongst all the Optionetics instructors and writers. I need to ‘hard-sell’ myself to you (just a joke!) but I do need your support (with thanks!).

So, you may ask, “Jack, do you have a problem here? Does this number bother you so much? Why do you care about the number?”  My humble reply is that while the number looks small as of now, it will grow bigger and bigger in the future. And it also has something to do with our trading. A lot of us are eager to start trading as soon as we have read a book or have done a 2-day seminar. Incidentally, a student from Singapore approached me this week by posting this question

“Jack, what are 3 low-risk consistent trading systems that options traders can apply on a daily basis to build up their capital?” 

Quite frankly, it was a shock to me because I learnt that this student did only a 2-day seminar and did not have any tools such as Profitsource or Platinum. He also told me that he has only a low starting capital.  My favorite question to you, my readers, is “Does this sound familiar?”

I understand this student’s problem, and I am fully aware of his desire to trade. However, my initial reaction is, “Why does he have this desire to trade, in particular on a daily basis?”  What is the chance of this student’s success after opening the live trading account immediately to trade on a daily basis? Do you think he will succeed or will he face some tough time before seeing the destination? Think hard on these questions, my readers, and better still, put yourself into this student’s shoes. If you have experienced such problems before, it is surely a good time now to flash back to the decision you made to solve these problems.

It’s my observation that newbies are constantly looking for the Holy Grail. Do you notice that the first question this student asked has something to do with the trading system, not the business plan, not the trading psychology, not the money management or risk management? I frequently shared with my students that the reasons why I can easily migrate from options trading to forex trading in such a short period of time is that I have acquired the proper trader’s mindset and habits. I have also got what it takes to be a trader. So, it is not about options trading being more difficult than forex trading that explains why I move to forex trading. It’s simply because at this point of time, I have semi-automated my options portfolio, which requires me to watch it for maximum two hours a week to give me a minimum 10% return every month. So, in this sense, my option portfolio can now generate stable income, and I can now devote more time to creating another stream of income. Don’t underestimate the power of creating MSI – which stands for multiple streams of income, especially passive income. A lot of my friends are aspiring to become full-time traders. I always take a different stand because I believe they all focus on creating only one stream of income—i.e., income from trading. However, I focus on enhancing my value to increase my PSI, which stands for primary source of income, and creating MSI every year. So, I would not aspire to be a full-time trader. Anyway, as of Thursday, May 30, 2008, I broke my record after putting three forex trading systems together, two of which are still in paper trading mode at this point, by generating a total of 261 Pips in a day. My average Pips per day has been around 40. So, my eyes had betrayed me by seeing 261 Pips. And it took me merely 15 to 20 minutes to put on these trades. I then switched off my notebook and continued with my tax work. Did I look at the screen all day? No. Why would I waste my time to watch the screen, which is not productive at all? It makes all sense to put such unproductive time to better use, including generating other sources of income.

Going back to this student’s question – he did tell me he wanted to fund his trading account in June (and I was worried after hearing that). Anyway, I explained to him that no matter which trading system he decides to deploy, eventually it is a trader’s psychology and money management that counts. A trading system producing 30% winning trades does not necessarily mean that it is a winning system. Conversely, a trading system producing 90% winning trades does not mean it is close to the Holy Grail. It is money management and psychology that matter. Indeed, both play a very important role in determining the success of a trader.

As an example, do you remember I mentioned before that someone traded my Big Mouth Iron Condor [BMIC] System and lost almost his entire account back in August 2007 and January 2008? If the BMIC System can give me consistent profits, why can’t it do the same for the poor guys? The reason is that I have applied a set of money management rule and am disciplined enough to deal with the trade when it needs my attention. I have the requisite experience in doing what I am supposed to do. So, if a loser looks at the system superficially, he may say that “yikes – this BMIC system sucks because I had my account wipe out.”  With such limited belief (hearsay) and failure to address the problem properly, he will migrate to another Holy Grail, and merry-go-round.  He won’t get to anywhere close to the destination and remains a life-time member of the 95% Club. I guarantee that.

So, if you understand what I have said above, what do you think you must do to address similar problem? To newbies, I bet it is exactly your problem right now. So, what must you do to overcome it? Please share with me your thoughts in my discussion board, and I look forward to hearing from you.

To access previous articles written by Jack Wong, please click here.

Jack Wong 
Staff Writer
Optionetics.com ~ Your Options Education Site
Visit Jack’s Discussion Board

• Email This Article
• View Full HTML
• Digg This
• Delicious
• Subscribe

Recent Articles by Jack Wong, Optionetics.com

• December 1, 2008
  Lessons from My Grandmother, Part V: The Choice Is Yours
• November 24, 2008
  Lessons from My Grandmother, Part IV: Respect Yourself and Others
• November 17, 2008
  Lessons from My Grandmother, Part III: Taking Charge of Your Life
• November 10, 2008
  Lessons from My Grandmother, Part II: Dealing With Loss
• November 5, 2008
  Lessons from My Grandmother, Part I: Never Give Up