The Five Sacred Cows Terminator (Profitunity - Bill Williams)

As a newbie in market, we think that market can give us a big return in short time, we just listen what the expert say, we read such a book to defeat the market, we always hope that our stock increasing, etc. But, everybody can’t get the return likewise.There are some constraints why everybody can’t get the return likewise, because they are thinking like other investor/traders.

You can break the cycle of failure by recognizing the things that cause failure.You probably dream about what every other investor/traders desires, which is success in the markets. However, when you trade, you come away with fewer goodies than you had counted on. Before you to become a consistent winner trader, you must have some basic fundamental truth. This basic fundamental can completely change your trading future in a way that it seem extreme. Profitunity call them as The Five Sacred Cows Terminators.
There is the Five Sacred Cows Terminator:

1. Don’t listen to the popular experts
Remember that financial writers know as little as and perhaps even less than you do about the markets. They are paid by the word and not by truth. As stated earlier, if they really understood the markets, they could make many times more money trading than they do writing about trading.
Ask yourself a question: Why do none of these analysts and commentators ever show their personal trading track records? Could it be because they are not personally able to make profits in the markets? If they were good at trading, they probably would be eager to tell you how much profit they are making.

2. There is no such thing as bullish/bearish Consensus
Remember that the market’s primary job is to instantly find that exact place where there is an equal disagreement on value and an agreement on price.

3. There is no such thing as Oversold/Overbought
If there is no such thing as bullish or bearish consensus, then it logically follows that there cannot be any such thing as an oversold or overbought condition. How can it be measured when the markets are specifically designed to destroy any oversold or overbought situations in microseconds, well before the traders see it on their screens and days before they start talking about it?

4. Most Money management suggestion are ineffective
Most of us have had the experience of using a wallet stop, only to see the market turn around and leave us with a much smaller equity than we would have had if we had traded market movement. That kind of protective thinking comes directly from fear, and in the markets,fear never wins in the overall picture. Our only hope for consistent profits is to get in synch with the market and attune our own personal strategy and energy to that of the market.

5. Common formulas for profitable trading do not work
Two oftenrepeated formulas for successful trading are (1) buy low and sell high and (2) to make profits you must trade with the trend. Those two statements are absolutely incompatible. If you buy low or sell high, you are standing in the way of the trend, not following it. And if you follow the trend, you are not buying low or selling high. The Profitunity strategy is to know when to use either one of the two approaches. There are times when it is best to trade against the trend and other times when you want to go with the trend. The choice of which strategy to use is determined by the market itself. Mother Market always tells us exactly what we should do. And when we do not, the market will tell us where we went wrong and what we have to do to correct the error and get back into the profit-making mode.

THE SIMPLICITY OF ALL MARKETS

Before you start ur trading, you should be know about Market. But don’t you thing that market is easy to defeat or the market is difficult to defeat. You must understand that market is same with your mind. Make your mind to think that market is simple not Easy (see my first article). For example, please see this explanation about that.
The markets are not mysterious and unfathomable. The primary purpose of any market is to ration, at a reasonable price, existing and future supply to those who want it the most. You trade almost every minute of your life. Profiting in the markets is much easier when you really understand the underlying structure. To keep it as simple as possible, take the Flintstones as an example. You remember Fred Flintstone, a rather rough and outdoors kind of guy, and his more domestic next-door neighbor, Barney? Fred sees himself as a macho he-man who likes to hunt dinosaurs. One day he goes out and kills a big something-a-saurus even though his freezer is already full of dinosaur burgers. Barney does not enjoy hunting and killing but he likes eating dinosaur Whoppers®. Barney prefers to sit around his backyard whittling wood and making clubs. Fred rarely takes time to make his own clubs.
Fred wanders over to Barney’s backyard and gets an idea. Why not swap Barney a couple of platters of dinosaur burgers for that new club he is finishing. So he puts this proposition to Barney: “Barney, I’ll give you two platters of dinosaur Whoppers for that new club. How ’bout it?” Barney says, “Okay, you got a deal.”
Fred and Barney have just created a market. It is just that simple! Both Fred and Barney valued what they wanted more than what they had. To Barney the burgers were more important (valuable) than the club he was making, and to Fred the club was more valuable than the burgers.

“All Markets are Created When Two or More People Have an Equal Disagreement on Value and an Agreement on Price”

When you bought your last car, the car was worth more to you than the money used to pay for it. However, to the person who sold you the car, your money was more valuable than the car. You created a miniature market when you made your deal. We buy bonds when we would rather own the bonds than the money we are paying for the bonds. Our fantasy (trading is a fantasy game; more about this later in the introduction) is that the value of the bonds will go up relative to the dollar. We bought them from some unknown trader who was just as confident that their value was going to go down. We have a real disagreement on current and future value, but we agree on price.
Every market in the world is designed to ration or distribute a limited amount of something (whether it be stocks, agricultural products, currencies, dinosaur clubs, or whatever) to those who want it most. The market does this by finding and defining the exact price where, at that moment, there is an absolute balance between the power of those who want to buy and those who want to sell.
The stock, commodity, bond, currency, and option markets all find that place of balance very quickly whether they are using open outcry or computer balancing. The markets find this place before you and I can detect any imbalance and before even the traders on the floor become aware of any imbalance. If the preceding scenario is true—and it is—then we can come to some very simple and very important conclusions about information that is distributed through the market and accepted without question. (Trading Chaos- Bill Williams.

Story to Understand about the Market

(The market is what u think it is by Bill Williams-Trading Chaos)

In my first time to read this book, I get a new paradigm about market. In some years ago, I usually think that market is unpredictable, based on my knowledge when I get from my education. But, all of there has changed since I read about this story. This story is good for your reference to know about Market before you trade in the market. You can make an conclusion by yourself.

There was a student in India who wanted to become enlightened. He left his family in search of an appropriate guru to guide him further on his journey. Stopping at one guru’s place of business, he inquired as to this guru’s method of becoming enlightened. The guru said, “Becoming enlightened is really quite simple. All you need to do is to go home each night and sit in front of a mirror for 30 minutes asking yourself the same question over and over. That question is: Who am I? Who am I? Who am I?”
The prospective student replied, “Hey, it can’t be that simple.”
“Oh yes, it is just that simple,” replied the guru, “but there are several other gurus on this street.”
“Thank you very much,” said the student, “I think I will inquire down the way.”

[Today we call this action seeking a second opinion.]
So the student approached the next guru with the same question.
“How do I become enlightened?”
The second guru replied, “Oh, it is quite difficult and takes much time. Actually, one must join with like-minded others in an ashram and do Sava. Sava means ‘selfless service,’ so you work without pay.” The student was excited; this guru’s philosophy was more consistent
with his own preconceived view of enlightenment. He always had heard it was difficult. The guru told the student that the only job open at the ashram was cleaning out the cow stalls. If the student were really serious about becoming enlightened, the guru would allow him to shovel all the dung and be responsible for keeping the cow stalls clean. The student accepted the job, feeling confident that he must be on the right path.
After five long years of shoveling cow dung and keeping the stalls clean, the student was becoming discouraged and impatient about enlightenment. He approached the guru and said, “Honored teacher, I have faithfully served you for five years cleaning up the dirtiest part of your ashram. I have never missed a day and have never complained once. Do you think it might be time for me to become enlightened?”
The guru answered, “Why yes, I believe you are now ready. Here is what you do. You go home each night and look at yourself in the mirror for 30 minutes, asking yourself the same question over and over again. That question is: Who am I? Who am I? Who am I?”
The very surprised student said, “Pardon me, honored one, but that is what the other guru down the street told me five years ago.”
“Well, he was right,” responded the guru.
“Then why have I shoveled cow dung for five years?” asked the student.
“Because you are stupid, that’s why,” replied the guru.

I think of that story quite often while working with traders. One of the first problems I encounter is convincing traders that making profits in trading is really quite simple—notice, I did not say easy. There is a world of difference between a concept’s being simple and being easy to carry out.
Looking at yourself in the mirror for 30 minutes each night is a simple concept, but asking yourself the same question over and over again and seeking an honest answer is not easy. As a psychologist I have found that we humans have two innate tendencies: (1) We tend to overcomplicate everything we touch and, because of that, (2) we cannot see the obvious.
To most traders and investors, the market is a dangerous and undependable animal. Their mottoes are: “Don’t count on it” and “Get it before it gets you.” They see the market as a dog-eat-dog world where other traders/investors are the dogs. This is not an accurate picture of the markets.