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Apr 3
8.5 How do Top Traders Trade?

Would you like to do forex trading like the professionals and achieve profit from the stock market? Here is the holy grail of investors.
1. Benjamin Graham - Forex Trading Markets always over-react :
Ben Graham is considered a father of investment analysis. When he was working in Wall Street in the 1930s and 1940s he developed basic principles which are still in practice, and timely tested them on historical stock market date.
He was the discoverer of value investing rather than growth investing, producing precise methods of measuring when stocks are reduced and therefore time to buy them. His methods are pre dated to the days of computerized stock screeners, being quantifiable they work excellently with them.
On the other, the most attractive of his ideas was imaginative not scientifically accurate. It envisioned an imaginative stock market that includes every individual capital spending.
This individual would wake up every day. Either an optimistic frame of mind, where he would offer to buy all the shares, or a pessimistic, where he wanted to dump all his shareholding.
It explains that selling your shares when the forex trading market is optimistic and buying when the forex trading market is pessimistic. Graham explains that such opposing position is the most suitable way of taking full advantage of forex trading market over-reaction.
2. Warren Buffett - Don’t buy what you don’t understand :
The most frequently quoted investors is Warren Buffet, and its easy to fill hundreds on articles by his quotes. What he has done is more important than what he has said.
In the 8th decade of his life, Buffett, a down to earth person from Omaha, Nebraska made a real stock market investment of $100 in 1954 into $20 billion by 2002. He followed the foot steps of Benjamin Graham, but also developed his own. May be the most amazing of these is that he can stand aside from a thriving forex trading market, forgoing substantial gains, just as he did not understand what was controlling prices.
After 13 years with compound growth of 30% in 1969 he wind up his partnership. The book written by John Tran, the Midas Touch, Buffett told his partners “I am out of step with present conditions. I will not abandon a previous approach whose logic I understand in order to embrace an approach which I don’t understand”
After three years, in 1972, the forex trading market came across abrupt collapse after depression. Buffet was out, and in cash. In late 1980s when high technology boom appear. He openly admitted that he did not understand technology shares ( a confession that should have been made by others who bought them).
3. Peter Lynch - running winners :
Fidelity’s US based Magellan Fund from 1977 till 1980 was ran by Peter Lynch, at that time its value increased rapidly to 2,700%. He learned repeatedly during those bull forex trading market times that running winners was the means of achievement to overtake the forex trading market.
He said that you would only require few stocks that surge ten fold to give you enormous out performance. At the other side of the scale you need to dispose of the losers quite quickly. The other method practiced by many other investors, was to take gains at about 30 per cent but hold on to the losers that according to him is like watering the weeds and cutting the flowers.
Lynch quickly admitted that Magellan Fund had thousands of stocks but hardly any of them ever increase ten fold, but the winners he had, he did not let go of quickly.
4. Anthony Gray - You don’t need to be immersed in the forex trading market :
As a matter of fact Tony Gray overtake Peter :Lynch for almost 12 years, while Gray was running a fund for Sun Trust Bank in Orlando, Florida. Since 1981 - 1993, the fund rose on average 21.5% a year.
According to Gray visited New York stock exchange only once in 30 years. In his autobiography, A thousand miles from Wall Street, he said that he do not find any disadvantage being so far from the centre of forex trading. He does not call during holidays and does not take loads of work at home.
The point here to emphasize is that if you have required confidence in the stocks you selected and know their businesses good enough, you don?t have to be constantly worrying about them.
Possibly the reason behind Grays success is that he selected companies that produce products that anyone can easily understand, from shaving creams to toilet papers. By applying his price analysis and trading regularly, he learned to exploit small pricing in the market.
5. George Soros - Rely on your instinct :
In 2001, George Soros retired and he created a record investment ever, and also the most controversial.
Soro’s fund has created record. He has given cumulative annual return 32 percent which no one else has ever given. If you had invested $1000 in Soros’s Quantum fund in 1969, it would be $4m by 2000. however, Soros became infamous because of his hedge funds and the use of going “short&rdquo that is to sell something you don’t even own in anticipation of buying back more cheaply.
Soros made an individual more wealthy and powerful like a major economy. In September 1992, Britain was shaking on the verge of being forced out of the Europe?s Exchange Rate Mechanism. Pound traded by keeping ERM fixed currency bands. To attract international deposit it was made double digit interest rates, still the currency keep on struggling, because the mechanism was at a very high rate.
Soros analyzed the situation and sold $10bn sterling “short”, and made a $1bn profit overnight as Chancellor Norman Lamont accepted the loss and allow the currency to crash by means of the lower band.
According to Soros the markets are chaotic, and the up and down of prices is the outcome of market attitude. He always emphasized on those turning points, same he did when he made huge profits from the pound, but he does not depend on analysis but rather on animal instinct.
The biographer Michael Kaufman described Soros as someone who has suffered from backache, and estimated that the beginning of a pang was a definite indication that something was not right with his market position.
6. Jim Slater - The PEG ratio :
Jim Slater joined the controversial secondary bank Slater Walker Securities as a chairman. In 1973 he turned 2000 pounds of saving into a financial firm with a capital worth of 200 million pounds, but can not continue and was later fall down in a pool of debts.
No doubt that Jim Slater is an able stock picker who invented the use of the price earnings to growth ratio, we know it as PEG. This formula analyses the potential price earnings ratio, that is the value of a company’s share divided by the anticipated profits per share, with the company’s anticipated rate of increase in profits.
The PEG rule says that if company’s shares earning growth exceeds its forecast P/E ratio, then its considered a good value. Therefore, a company with a forward P/E of 10 is continuously growing up its earnings by 15 percent, then it deserve examination.
This was first outlined Slater’s book the Zulu principle, works excellent for continuous rise in earnings. The major disadvantage is that for much of the market cycle, all the advancing shares are in fact of poor value under a PEG examination, despite this it still keep edging up in price.
7. Anthony Bolton - Look for strength in business franchise :
The answer to Peter Lynch by Britain’s, Anthony Bolton has continuously overtaken the forex trading market in the course of the last five turbulent years, in the course of that Fidelity Special Situations fund he runs has increase its value twice. He has a team of 50 renowned analysts, he is not short of number crunching clout. Then what is he searching for?
In December with independent analysts, during question and answer session, Bolton said that he examined for business franchises with durable strength and powerful money generation that in the UK have a tendency to drive him near service businesses and away from manufacturing.
He has a tendency to take an 18 month view on a stock, he can also wait for longer than that on few instances.
For the future, Bolton thinks that the afresh bull forex trading market will continue for a while. But back to normal after nine months is impressive by the technical strength of price increases, and said that, during the period of bear market we have now come through, it would be a surprise if the bull market ends so quickly.

Would you like to do forex trading like the professionals and achieve profit from the stock market? Here is the holy grail of investors.

1. Benjamin Graham - Forex Trading Markets always over-react :

Ben Graham is considered a father of investment analysis. When he was working in Wall Street in the 1930s and 1940s he developed basic principles which are still in practice, and timely tested them on historical stock market date.

He was the discoverer of value investing rather than growth investing, producing precise methods of measuring when stocks are reduced and therefore time to buy them. His methods are pre dated to the days of computerized stock screeners, being quantifiable they work excellently with them.

On the other, the most attractive of his ideas was imaginative not scientifically accurate. It envisioned an imaginative stock market that includes every individual capital spending.

This individual would wake up every day. Either an optimistic frame of mind, where he would offer to buy all the shares, or a pessimistic, where he wanted to dump all his shareholding.

It explains that selling your shares when the forex trading market is optimistic and buying when the forex trading market is pessimistic. Graham explains that such opposing position is the most suitable way of taking full advantage of forex trading market over-reaction.

 

2. Warren Buffett - Don’t buy what you don’t understand :

The most frequently quoted investors is Warren Buffet, and its easy to fill hundreds on articles by his quotes. What he has done is more important than what he has said.

In the 8th decade of his life, Buffett, a down to earth person from Omaha, Nebraska made a real stock market investment of $100 in 1954 into $20 billion by 2002. He followed the foot steps of Benjamin Graham, but also developed his own. May be the most amazing of these is that he can stand aside from a thriving forex trading market, forgoing substantial gains, just as he did not understand what was controlling prices.

After 13 years with compound growth of 30% in 1969 he wind up his partnership. The book written by John Tran, the Midas Touch, Buffett told his partners “I am out of step with present conditions. I will not abandon a previous approach whose logic I understand in order to embrace an approach which I don’t understand”

After three years, in 1972, the forex trading market came across abrupt collapse after depression. Buffet was out, and in cash. In late 1980s when high technology boom appear. He openly admitted that he did not understand technology shares ( a confession that should have been made by others who bought them).

 

3. Peter Lynch - running winners :

Fidelity’s US based Magellan Fund from 1977 till 1980 was ran by Peter Lynch, at that time its value increased rapidly to 2,700%. He learned repeatedly during those bull forex trading market times that running winners was the means of achievement to overtake the forex trading market.

He said that you would only require few stocks that surge ten fold to give you enormous out performance. At the other side of the scale you need to dispose of the losers quite quickly. The other method practiced by many other investors, was to take gains at about 30 per cent but hold on to the losers that according to him is like watering the weeds and cutting the flowers.

Lynch quickly admitted that Magellan Fund had thousands of stocks but hardly any of them ever increase ten fold, but the winners he had, he did not let go of quickly.

 

4. Anthony Gray - You don’t need to be immersed in the forex trading market :

As a matter of fact Tony Gray overtake Peter :Lynch for almost 12 years, while Gray was running a fund for Sun Trust Bank in Orlando, Florida. Since 1981 - 1993, the fund rose on average 21.5% a year.

According to Gray visited New York stock exchange only once in 30 years. In his autobiography, A thousand miles from Wall Street, he said that he do not find any disadvantage being so far from the centre of forex trading. He does not call during holidays and does not take loads of work at home.

The point here to emphasize is that if you have required confidence in the stocks you selected and know their businesses good enough, you don?t have to be constantly worrying about them.

Possibly the reason behind Grays success is that he selected companies that produce products that anyone can easily understand, from shaving creams to toilet papers. By applying his price analysis and trading regularly, he learned to exploit small pricing in the market.

 

5. George Soros - Rely on your instinct :

In 2001, George Soros retired and he created a record investment ever, and also the most controversial.

Soro’s fund has created record. He has given cumulative annual return 32 percent which no one else has ever given. If you had invested $1000 in Soros’s Quantum fund in 1969, it would be $4m by 2000. however, Soros became infamous because of his hedge funds and the use of going “short&rdquo that is to sell something you don’t even own in anticipation of buying back more cheaply.

Soros made an individual more wealthy and powerful like a major economy. In September 1992, Britain was shaking on the verge of being forced out of the Europe?s Exchange Rate Mechanism. Pound traded by keeping ERM fixed currency bands. To attract international deposit it was made double digit interest rates, still the currency keep on struggling, because the mechanism was at a very high rate.

Soros analyzed the situation and sold $10bn sterling “short”, and made a $1bn profit overnight as Chancellor Norman Lamont accepted the loss and allow the currency to crash by means of the lower band.

 

According to Soros the markets are chaotic, and the up and down of prices is the outcome of market attitude. He always emphasized on those turning points, same he did when he made huge profits from the pound, but he does not depend on analysis but rather on animal instinct.

The biographer Michael Kaufman described Soros as someone who has suffered from backache, and estimated that the beginning of a pang was a definite indication that something was not right with his market position.

 

6. Jim Slater - The PEG ratio :

Jim Slater joined the controversial secondary bank Slater Walker Securities as a chairman. In 1973 he turned 2000 pounds of saving into a financial firm with a capital worth of 200 million pounds, but can not continue and was later fall down in a pool of debts.

No doubt that Jim Slater is an able stock picker who invented the use of the price earnings to growth ratio, we know it as PEG. This formula analyses the potential price earnings ratio, that is the value of a company’s share divided by the anticipated profits per share, with the company’s anticipated rate of increase in profits.

The PEG rule says that if company’s shares earning growth exceeds its forecast P/E ratio, then its considered a good value. Therefore, a company with a forward P/E of 10 is continuously growing up its earnings by 15 percent, then it deserve examination.

This was first outlined Slater’s book the Zulu principle, works excellent for continuous rise in earnings. The major disadvantage is that for much of the market cycle, all the advancing shares are in fact of poor value under a PEG examination, despite this it still keep edging up in price.

 

7. Anthony Bolton - Look for strength in business franchise :

The answer to Peter Lynch by Britain’s, Anthony Bolton has continuously overtaken the forex trading market in the course of the last five turbulent years, in the course of that Fidelity Special Situations fund he runs has increase its value twice. He has a team of 50 renowned analysts, he is not short of number crunching clout. Then what is he searching for?

In December with independent analysts, during question and answer session, Bolton said that he examined for business franchises with durable strength and powerful money generation that in the UK have a tendency to drive him near service businesses and away from manufacturing.

He has a tendency to take an 18 month view on a stock, he can also wait for longer than that on few instances.

For the future, Bolton thinks that the afresh bull forex trading market will continue for a while. But back to normal after nine months is impressive by the technical strength of price increases, and said that, during the period of bear market we have now come through, it would be a surprise if the bull market ends so quickly.

 


Trading Guide

 

8.1 A Forex Trading Plan

8.2 Forex Training: What to Look For in a Forex Training

8.3 Forex Course: A Quick Forex Guide for Traders

8.4 3 Lessons Learned from Ace Investors

8.5 How do Top Traders Trade?

8.6 Managing Your Trade

8.7 There Are Clues All Around You

 


Forex Education

 

The Basics of Currency Forex Trading

Technical Analysis

Technical Indicators

Fundamental Analysis

Intraday Trading

Emotional & Behavioral Part

Risk & Money Management