July 1998
 |
Besides my interest in letting you know about this service, I thought Hill would be an interesting interview because he has been involved with trading for a while; in fact, he started trading commodities back in 1958! We can safely state that he has market experience, and anyone with real-time trading experience is worth listening to. Hill stresses that for you to become a successful trader, you have to create your own system. You don't have to invent a technique from scratch, but you do have to take someone else's work, change it so it conforms to your parameters and make it unique to you. So how do you go about that? I'll tell you: It's a lot of work.
Trading is a craft, and its practitioners can be likened to a woodcarver who takes a block of wood and slowly removes the outer layer, leaving behind the work of art that he envisioned in the wood. For traders, our goal is to carve money out of the market, day by day, week by week. The artist doesn't perfect his art overnight, and neither does the successful trader. It is a process of self-discovery to find out what works best for you.
Think of it this way. Everyone looks at the markets and sees something different. If a trader is successful, he or she can make a great deal of money, but the trader can also lose his shirt. Losing money is painful -- and then we are talking about emotions, and emotions, like the markets, differ for everyone.
And when you put a trade on, your reaction is different from everyone else's, too; you are at the mercy of whatever direction the market takes. And where might the market trade after you take a position? No one knows! We begin to imagine where the market may go, and when you do that, I can guarantee that you are in trouble, because your emotions and your imagination come into play. Whenever your imagination is in conflict with logic, your imagination will always win out. You may start to imagine that a bad trade will turn good, or a good trade will turn bad. Suddenly, your imagination is in charge of your trading, and that is the worst situation you can be in!
And that's why there is always so much to be said about the importance of developing a set of procedures. As John Hill comments in the interview, you have to make the system your own, with your own unique foibles. If the system is unique to you, then you have a much better chance of focusing on reality, staying with your trading logic, and not letting your imagination get a hold of your account. So you have to develop a plan, stick to it -- and that is a great deal of work. And now you know the biggest trading secret of all!
