SECRET #2: SOMEONE IS ON THE OTHER SIDE OF THE TRADE, AND IT’S NOT YOUR FRIEND

Secrets of the Elite Traders

SOMEONE IS ON THE OTHER SIDE OF THE TRADE, AND IT’S NOT YOUR FRIEND

It is necessary to know that every time you place a trade, someone on the other side of this transaction will place it in the other direction. For example, every time you buy a stock, there is someone on the other side of the trade who sells it to you. The $64,000 question is, “Who’s smarter?” Who’s right, you or the person on the other side? Far too many traders and investors operate in the market as if they were buying and selling stocks from a large warehouse in the sky, stacked and stored in a stack of desired securities. This vague and flawed concept ignores the most important element of trading and promotes a false state of mind.

Trading must always be seen as a struggle, a struggle primarily with the self, but also a struggle against other market participants. As a trader, you must always be aware that with every trade you oppose the opinions and beliefs of other traders and investors, and they may well be the ones who are right. As a trader, it is essential to understand that you can only buy a stock because someone else is trying to sell it.

Conversely, you can only sell your shares at a certain price because someone is anxious to buy them at that price. To be the party that is right in most cases, you must first fully understand what successful trading is. This may sound simple, but you will be surprised that many traders do not know. Surveys have asked thousands of people the question, “What is successful trading?”

And almost always the typical answers were given, like e.g: “Successful action means to buy deeply and sell highly”, and “successful action wins more than it loses”. Although both statements contain some truth, they fall far short of the actual answer, especially because they are vague and eliminate the personal element we were talking about earlier. To approach the game of trade in the right way of thinking, you need to know the answer to this simple question. So let us give the right answer here and now before we delve deeper into the matter.

Successful trading is buying goods (shares) from someone who sells them too cheaply, and selling these goods back to him or someone else when you know they are too expensive. Read this statement several times before you continue, because it contains one of the most important keys to trading championship. If you understand it correctly, you will realize that in essence, successful trading is the art of finding and exploiting a fool, someone who is completely unaware of the current value of the commodity in or at hand. This is the truest definition for successful trading, and those who approach each trade with that in mind will play the game with a deeper and more accurate insight.

The problem with other definitions of successful trading is that they miss the most valuable point. In any winning trade, someone must be the scapegoat, the idiot, the fool who sells the goods too cheaply to someone else and buys them back too dearly. You have to learn to make sure you don’t and fall into the category of fools.

ELITE TRADER TIP

Elite traders play the role of the Good Samaritan in many ways. They relieve the oppressed by buying shares from them when they are in pain and satisfy those who are afraid by selling their shares to them when they become greedy. In some ways, Elite Traders are pain relievers and satisfiers of greed.

… Good Samaritans? … no, rather merciless exploiters who know how to exploit the weaknesses of their counterparts.

Disclaimer:

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. Hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. All information on this website is for educational purposes only and is not intended to provide financial advice. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold this information harmless in any and all ways.

Risikohinweis:

Börsengeschäfte sind mit erheblichen Risiken verbunden. Wer an den Finanz- und Rohstoffmärkten handelt, muss sich vorher selbstständig mit den Risiken vertraut machen. Eventuell dargestellte Analysen, Techniken und Methoden stellen keine Aufforderung zum Handel an den Finanz- und Rohstoffmärkten dar. Diese dienen ausschließlich der Veranschaulichung und Weiterbildung und Informationszweck und stellen keine Anlageberatung oder sonstige individuelle Empfehlung dar. Sie sollen lediglich eine selbstständige Anlageentscheidung des Kunden erleichtern und ersetzen nicht eine anleger- und anlagegerechte Beratung. Der Kunde handelt gleichwohl auf eigenes Risiko und auf eigene Gefahr. Beachten Sie bitte die aktuelle Fassung der AGB.

By |2019-07-11T11:43:47+00:00July 11th, 2019|Expert Tips|0 Comments

About the Author:

After working in the Banking-Sector, Gilbert pursued further education and graduated from a technical school for computer science and business informatics. Following this, Gilbert worked for around 25 years as a software engineer, requirements manager, project manager and external project consultant for various international software and financial service groups such as: BAWAG/PSK Austria, Ceska Sporitelna, Unisys International, Allianz Austria/Suisse and Allianz SE. In 1999 he started to focus on EOD swing trading, and after receiving a professional trading education in Germany and New York, he gradually switched to intraday trading. In 2007/2008 he traded for a US-based prop trading firm for approximately 1.5 years. As the founder and CEO of AgenaTrader.com, Gilbert is responsible for the architecture and design of AgenaTrader Basic and the development of the components that support trading with AgenaTrader++, as well as for the worldwide launch of the trading platform and its upcoming services.

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