Trader's World article, fall 2008
The Three Types
Why They Win & Why They Lose
For the past 12 years, the Sacred
Science Institute has been dedicated to providing our clients with
an exclusive collection of rare financial market analysis and forecasting
publications from a highly secretive tradition of thought, which we call Cosmological
Economics. This tradition stems
from the work of the famous market master W. D. Gann, and extended through the
work of Dr. Jerome Baumring of the
Throughout the years, we have continued to seek out and make available further correlating material to support and develop this thesis, adding to our collections important lost works and new material on these subjects, ranging from market analysis, to astroeconomics, to scientific and esoteric treatises, which provide an elucidation of the basis of such universal theories. As a major part of this process, we continually search for and discover new resources and experts within these fields, and encourage and work with them to develop new presentations and advancements of these concepts, such as we did with the work of Daniel T. Ferrera, whose books and courses have significantly advanced the understanding of Gann analysis, cycle research, wave mechanic market structure, long term forecasting, including a 100 year forecast of the Dow Jones Averages, out to 2108 (which accurately predicted the Oct 07 top and current market declines), automated trading systems, and a number of other key topics. As a continuation of this process, we are very happy to announce the unveiling of a new level and aspect of this work, one which many would consider to be the most valuable and important aspect, the application of the theoretical work to the most difficult and applied field of successfully trading the financial markets. We are convinced that the course we present to you here is represents one of the very best applied trading courses ever made available to the public, and certainly the best that we have ever seen in our 25 years of experience.
Over the many years that we have been closely involved in this field, we have had the opportunity to meet 1000’s of analysts and traders, and we have found that those individuals who have immersed themselves into this tradition generally fall into 3 categories. First, there are those who have invested a considerable amount of time and money into their research, but who have never taken the step of actually applying it to trading, remaining primarily theoretical researchers. Second are those who have invested the same cost and energy into the work, but who have also spent years attempting to become successful traders without ever finding the necessary Key to produce the trading results they desire. Third are the successful professional traders who have developed working applications which provide them with moderate to extreme success in the markets, enough to make trading their only or primary profession. This third category represents our primary and most serious clientele, those most anxious for each new piece of material we uncover, because each added insight contributes to their overall understanding and improves their success in the markets.
In our ongoing search for new material, one of the key elements we most painstakingly seek are methods and insights which will help turn these first two categories of analysts into the third category of successful traders. However, as most of you reading this well know, this is the most difficult category of teaching material to find. The reason for this is twofold. First, is that those professional traders who understand the true methods of successful trading are reticent in giving up their hard-won secrets that are the source of their income and sustenance, in part because they are afraid that public knowledge of such principles will lessen the effectiveness of the techniques in their own trading, and partly because many of them feel that success in trading is something only earned by an individual’s own effort and intelligence. When such traders do write books, many of the best of which are the books to be found in our catalog, such as the work of W. D. Gann, they present the work in such a way as to make it exceedingly difficult to penetrate into the true methodologies they are actually using to successfully make money in the markets. It is evident in reading such works that there are profound insights contained therein, and with much hard labor, some analysts are able to penetrate the veils and connect the missing links to understand the hidden applications, these generally being the third category mentioned above. The others scratch their heads and continue their search for the missing Key that will provide them with the success they have so long sought.
The second reason that it is difficult to discover working trading applications is often dismissed as being the result of there being only a particular type of person, with the proper intellectual faculties, emotional balance, and an engineering type of mind that is necessary for trading the markets, and that this type of person is quite rare and special. Some have come to the conclusion that there are theorists and there are traders, and that never the twain shall meet. If you don’t already have “it,” you won’t get “it,” and will forever remain in a circular quest for the unattainable. While it is certainly true that some people simply do not have the emotional stamina for the art of trading, which requires the strength to be able to make hard decisions and initiate upon them at the opportune time, and then to ride the emotional roller coaster of watching the market move with, or worse, against you, we feel that the actual truth stems from the simple fact that 95% of those who attempt to trade the markets are lacking the fundamental principles, insights, strategy, and knowledge required to be a successful trader.
Once one understands, however, that it is not some magic wand that will make one a successful trader, but a collection of knowledge and applied tools which have actually been time tested and proven to work in the markets that is the missing link, one is able to set out on the quest to discover those needed tools. Most aspiring traders fall short at this point, because they lack the dedication and determination to spend the time and money it takes to discover these tools. In having known 1000’s of traders, one absolute fact that is consistent amongst all of those who are truly successful, is that they have generally spent 10’s of thousands of dollars, if not $100’s of thousands on their education and research. Most have extensive libraries, and have attended dozens of seminars and trading courses, and most agree that very few of them were worth the money, and yet they continue to search until they find something that works. One of the most common facts about unsuccessful traders is that they are continuously hesitant to spend enough time and money to acquire a real education in the markets. W. D. Gann said that in order to make “Speculation a Profitable Profession” (the title of one of his courses) one must become a true professional about it, and acquire a professional level education. Dr. Baumring used to say that you don’t become a brain surgeon in a day, but only through long, hard study, 7-10 years of study, yet millions of people think that for some strange reason they can become a trader overnight, and that it is easy.
What’s particularly amazing is that most people will spend $100,000 to $200,000 on a college education, the tuition at most private schools these days being $40k a year!, yet they balk at spending $5-10,000 obtaining an education in the markets. They hardly realize that there is very little taught at a university that is not publicly available for FREE in any public library or on the Internet. And yet they spend this money without any thought of whether they are receiving an education that will provide sustenance for them and their families for the rest of their lives. Certainly, there are some professions which require specific academic standards, credentials, and specialized training in order to work in those fields, but the majority of students at college are not developing such specialized training. And again, what we are discussing here is trading, and anyone who has looked at any academic curricula or been to college, can tell you that there is absolutely NO education available at universities that teaches anyone how to trade! And yet in the modern world, every individual who has any savings or a simple 401K will find themselves confronted with the necessity to make financial decisions for which they are totally unqualified and unprepared.
People can obtain an MBA and get a job on Wall Street, but the disastrous state of our current economy, the dangerous jeopardy of the banking system, and the recent collapse of almost all of the great old Wall Street financial firms, should be enough to demonstrate that these sophisticated educations provide even the experts with very little true knowledge about the markets. These professionals and institutions, and even such revered figures as Alan Greenspan, all profess surprise over the current market and economic collapse, while most of our clients have been expecting this for some time, and were well prepared to take advantage of it. The current crisis state of the economy is unlikely to resolve itself for many years to come, with some of our projections, like Dan Ferrera's cycle models presented in his book, Wheels Within Wheels, even projecting this bear market to last as long as 14 years, into the 2020's, leaving long term buy and hold investors with very little opportunity to regain their recent losses, let alone to successfully invest for the future. However, the incredible volatility of the markets at this time, with uncommon 500+ point daily swings, provide those with the ability to call turning points, and the knowledge of how to trade such swings, with incredible opportunities to make exponential profits unlike any other time in the history of the financial markets. This is truly a trader's market, and will be for many years to come, and without these kinds of skills, the average investor will be hard pressed to make even minimal profits in their portfolio.
So, in the face of these considerations, where is the aspiring investor or trader to turn to receive an adequate education in the markets, whether it be simply to manage his 401K or retirement portfolio, or whether it be to become a successful stock or commodity trader? It's one thing to have a general cyclic indication of market expectations, but an entirely different thing to know how to take advantage of and trade those insights in real time. If Ferrera's S&P Forecast is even close to being correct, we are in a Bear Market for the next 10-15 years, or best case scenario, we'll see a sideways trading range for most of that period, like we saw in the 1960’s -80’s. In this kind of market, the "buy and hold" strategy taught to most investors will be worse than useless, so people need to find a new way to make money in these volatile and uncertain times. The ONLY way to do this is to learn to project, in advance, turning points and to trade them! With people losing their jobs everywhere, it’s comforting to know that a trader works for himself, so has no fear of losing his job and joining the ranks of the unemployed, if he can trade!
For the trader, these highly volatile markets offer one of the greatest opportunities in history to generate unimagined returns. With the kind of volatility we have seen in the last two years, with intraday swings of 100’s of points on the Dow, and some stocks jumping and collapsing by 50% almost overnight, those who know how to forecast and trade such swings have the regular opportunity to generate returns that would have taken decades in times past. Such trading requires the ability to pinpoint exact turning points on a daily and even intraday level. Or for a more intermediate term investor, projecting the turns on a daily and weekly time frame is all that is needed to catch the general trend of the market as it bounces from its high to low within a trading range. This is not as complicated as one may think, for with the right tools, foreseeing and trading the intermediate trends of a trading range is almost obvious. Many professional traders do this all the time, but generally the process is not taught to the common investor or beginning trader.
If one asks professional traders what the most fundamental necessities required to make consistent profits in the markets are, they will generally all boil their expertise down to a few key fundamentals. These fundamentals turn out to be, first and foremost, good risk management! Second, effective tools that clearly identify future turning points, specifically, highly tradable points after which a significant market movement transpires. And finally, techniques which identify price level entry points, exit target points, and techniques for trend determination. It is somewhat universally agreed upon by successful traders that if you know WHEN to take your positions, WHERE to enter and exit your trades to maximize profits, as well as where to place your stops so as to limit your risk without getting knocked out of your positions, and HOW to determine the nature of the ensuing trend, that you will be successful in your trading endeavors.
Many people spend a lifetime studying numerous trading books and courses without ever finding a consistent means to achieve their desired results, though really with the right direction and proper material they could probably surmount this obstacle without great cost or difficulty. The first step is in learning to favorably bias the risk/reward equation. One must develop a “statistical advantage” before even beginning to trade, through applying both account management skills, followed by consciously biasing the risk/reward ratio of one’s trading strategy. This is really the only way to make a living in the trading business. Everyone always talks about the upside of trading, believing that with unlimited potential for gain and limited losses, that it’s inevitable that given enough time and resources you will eventually hit it big. However, in reality, success in this endeavor is very low, because nobody truly understands how to properly apply these principles of risk management when they first begin trading. Even many long time traders have never mastered these most fundamental ideas, and that is what separates the successful traders from the unsuccessful.
Again, it is Dan Ferrera who has clearly realized that this problem lies at the core of most failed trading attempts, and with this in mind he developed a specialized trading course, The Keys To Successful Speculation, which directly addresses these issues, clearly laying out the principles of risk management in direct and simple terms that any beginning trader can quickly master and apply to their trading. Most people just don’t realize that it is this side of trading that is blocking them from success. Ferrera’s Keys provides the “statistical advantage” through risk management that will allow a trader to skew the risk/reward equation in their favor all the time.
Once this is achieved, there are many tools which will become much more effective in producing consistent profits. However, as mentioned above, the most effective way to produce better returns in one’s trading will come from an ability to forecast important turning points in advance, so as to be able to identify and trade profitable trends. Many teachers and tools attempt to produce these results, but most end up being hit and miss, or are simply too complicated for the average analyst to comprehend and effectively apply. However, the new trading course by Dr. Alexander Goulden, Behind The Veil, presents some of the most effective and powerful techniques to accomplish this goal. Dr. Goulden uses a unique combination of geometric price and price/time projection tools, combined with some extremely powerful timing techniques which clearly identify future turning points from which tradable trends ensue. His techniques are developed from a similar tradition and theoretical basis as those used by the great W. D. Gann, but unlike Gann, are much easier to comprehend and apply by the average trader. They involve the use of geometrical manifestation templates derived from ancient systems of metaphysics and cosmology, as well as timing tools developed from celestial mechanics, Pythagorean harmonics and vector cycles. His techniques have been shown to work in all markets, stocks, commodities, indices and Forex, and on all time frames from minute to monthly, with incredible accuracy and effectiveness, which when combined with the proper risk management techniques should help many traders discover the trading success they have long desired.
These two courses alone will provide the tools necessary to allow most analysts to trade the markets with an accuracy only the best traders possess, and to take advantage of the incredible opportunity the volatility of today's markets presents. Whether you are a conservative investor or speculative trader, these tools will allow you to call turns and trade the short or long term trends of the market, whether it is going up or down, while allowing you to limit your risk and while maximizing your returns. This kind of trading may be the only way for the individual investor or trader to make money over the coming decade of unstable markets and crumbling economies.
FOR DETAILS ON DR. ALEXANDER GOULDEN’S TRADING COURSE – BEHIND
FOR DETAILS ON DANIEL T. FERRERA’S OUTLOOKS & COURSES:
FOR FERRERA’S TRADING COURSE – KEYS TO SUCCESSFUL SPECULATION:
FOR FERRERA’S WHEELS WITHIN WHEELS WITH HIS 100 YEAR DOW FORECAST:
FOR FERRERA’S YEARLY OUTLOOKS:
LINKS TO OUR BEST MARKET BOOKS & COURSES:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. There is no assurance that the strategies and methods presented in this book will be successful for you. Past results are not necessarily indicative of future performance. The examples presented in this book are for educational purposes only. The data used is believed to be from reliable sources but cannot be guaranteed. The methods presented are not solicitations of any order to buy or sell. The author, publisher, and all affiliates assume no responsibility for your trading results, and will not be liable for any loss, damage or liability directly or indirectly caused by the usage of this material. There is considerable risk of loss in Futures, Stock and Options trading. You should only use risk capital in all such endeavors. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.