Today I was interviewed by John Kurisko from www.daytradingradio.com. We had a great conversation about trading e-minis, which spawned a bunch of questions from traders who are new to e-minis. I chose to post this question on the blog becuase I think there are a lot of traders who have the same questions… Enjoy!

Chris,
Heard the interview on Day Trader Radio today and was impressed. Never traded before and I am having information overload on all that is out there. My current career is stalled out until the economy comes back and that is my biggest reason for looking at other options. I have years of training and education in a field where I have no control over my income. My question is this; Do I need a basic level of knowledge to start this and if so where do I get it? I am coming from a construction management background and have no clue about trading or even the language used in it. I know that can be a benefit in some fields because there are no bad habits to unlearn but I would think having a basic understanding of terms and markets would help. Where do I take this desire I have from here?
Clay

Here’s my response to Clay…

Hi Clay,
You’ve asked some really great questions in this email. I think a lot of new traders are in the same boat; you’ve heard about the incredible opportunity day trading can offer, but there’s just so much information out there you don’t know where to start. I’ll be the first to tell you that most of the trading “education” out there is regurgitated theory that can’t make you money in today’s market. You can go to any book store and learn the basics (terminology, tools of the trade, basics of analysis, etc.), but none of that will really put you in a position to make money trading.

What you really need is a solid trading strategy that will take the guessing out of what trades to take, how to manage the risk on your trade, and when to take profit. You can do what I did back in 2002 and invest the time, money, and effort into developing your own strategy (which can take years), or you can invest in someone else’s system. Most people choose to buy a system since it can offer an income opportunity in a much shorter time period with less effort on your end. The problem is that most systems being sold on the market today just don’t make money. Unfortunately, there’s a lot of people selling these “automated trading robots” that promise you’ll make $1,000,000 while you sleep. And the truth is, those systems are a total scam. Every fully automated trading system eventually fails. For example, I know group of highly intelligent traders who invested years of their lives and hundreds of thousands of dollars into creating a trading system that was fully automated. It worked for about 6 months, then became worthless.

If you want a sure-fire way to make consistent profits in the market, then you need a solid educational foundation and a strategy that can adapt to market conditions. Also, the system needs a statistical “edge” over the market. This “edge” is basically trades that have specific rules and pre-define the risk on every single trade. For example, if you have a system that wins 75% of the time and has winners that are 2X bigger than losses, you’re going to be profitable by default. Here at the Emini Academy, we do both. First, we teach you all the basics of day trading and e-minis, then we teach you how to master a trading strategy that has a very nice “edge” over the market. I’m obsessed with risk management and have incorporated a pre-determined risk strategy into our system.

Best regards,
Chris Dunn

Filed under: Interviews, MAP Trading Strategy, Trading by Chris Dunn