In the endless sea of gurus and trading services out there, how do you decide which way to go? You may find yourself evaluating each one based on what kind of services they provide. Because as everyone knows the more time and effort you put into honing your trading skills, the better your profits will be down the line, right? Well, not exactly. In fact, often more time studying, trading or even just watching the market can lead to far LESS profits when all is said and done.
And you’ll also end up losing one of the most valuable commodities we all hold dear… Time. To save time and a lot stress you need find someone who knows where to tap. Consider the boilermaker story…
The Boilermaker, or Knowing Where To Tap by Steve Andreas
There is an old story of a boilermaker who was hired to fix a huge steamship boiler system that was not working well. After listening to the engineer’s description of the problems and asking a few questions, he went to the boiler room.
He looked at the maze of twisting pipes, listened to the thump of the boiler and the hiss of escaping steam for a few minutes, and felt some pipes with his hands. Then he hummed softly to himself, reached into his overalls and took out a small hammer, and tapped a bright red valve, once. Immediately the entire system began working perfectly, and the boilermaker went home.
When the steamship owner received a bill for $1,000 he complained that the boilermaker had only been in the engine room for fifteen minutes, and requested an itemized bill. This is what the boilermaker sent him:
For tapping with hammer: $1.00
For knowing where to tap: $999.00
If you need to watch dozens of educational videos to learn an overwhelming amount of complicated rules just to be able to trade the market, then those folks likely don’t know where to tap.
Socrates once said, “I cannot teach anybody anything. I can only make them think.”
Some of these guys think they’ve stumbled upon some new way of analyzing chart data, so they compile all their know how into a library of videos. While this a noble effort to try to give new traders the edge they desperately seek, most of this is just a rehashing of the same old technical analysis that’s been around for eons. And you can find just about all of it readily available in books, many of which are right in your own neighborhood public library.
One example: The most definitive resource on chart patterns I’ve ever come across is Thomas Bulkowski’s Encyclopedia of Chart Patterns. Check it out before you blindly follow someone’s pattern approach into the abyss. He includes every pattern you’ve ever seen or heard of and the success rate of each one over time. You’ll be quite surprised at the low reliability of many “tried-and-true” patterns that a lot of folks are putting their money (and eventually yours) into.
If you’re searching for the holy grail of technical analysis, look no further than your own backyard.
Many websites offer videos and many other types of premium services. Feeling like you’re getting your money’s worth with all the extra stuff, can give you a false sense of security just long enough to deplete most of your savings. And a wealth of information doesn’t necessarily make you wealthy. The answers are more often found in the most unassuming places… You just need to know where to tap. -MD
Coming up in part 2 we look at the “Sunday Morning Setups” routine…
To view past positions check out our Trade History.