Why Aren't We Rich?
By John Adams
One Saturday morning,
while he was sitting at his computer studying the market,
David's 7 year old daughter came up, tugged at his shirt
sleeve, and said, "Daddy, why aren't we rich?"
He looked his child in
the eye, and thought to himself, what a great question -
why aren't we rich?
As she stood there
expectantly waiting for an answer, he struggled to come to
grips with the realization that, although he had focused
his undivided attention on nothing but creating wealth for
more than 15 years, he was still broke.
He had bought and sold
hundreds of Stocks and several properties over those
years, but had never made any real money to speak of.
He looked at his
daughter, and asked, 'what makes you think we aren't rich,
She looked at him
sternly and said, 'Because you said that if we were rich,
you and mom wouldn't have to go to work any more, and you
both still work all the time.
You said we could live
near the beach and play in the sand every day. I want to
know what you are doing about that. When can we go and
live at the beach?'
There’s nothing like
a child to cut straight to the heart of the problem - and
what was he doing about it?
'We're not rich because
daddy made some mistakes,' he finally answered.
'What kind of mistakes,
daddy,' she asked.
'Well, I bought some
shares that were going down and then didn't sell them soon
enough. Then I bought some houses but sold them again just
before they went up in price.'
'Why did you do that?'
He had to think long
and hard about that. He had no reason to buy shares that
were going down in the first place. He had no reason to
hold on to them when they kept going down. He had no
reason to sell the properties either, come to think of it.
Her logic was flawless
– why wasn’t he doing better financially than he was?
He knew in that
moment that he had to change his strategy.
He owed it to himself
and his family to finally get his act together and make
some changes - that was the day the pain of not living up
to his potential made him sit down and write out his
trading plan...his trading strategy and rules – he
had to have a life raft.
He started by writing
out his vision - what he wanted his life to look like when
he became a successful trader and investor, then worked
backwards from there - through the details of how he was
going to achieve his dream.
He saw in his mind the
4 bedroom penthouse on the beach, the red Ferrari 360, the
80 inch plasma screen computer monitor in an office
overlooking the surf beach 17 floors below, the family
holidays, the million dollar donations to worthwhile
causes and children's charities.
He visualised all the
tremendous benefits of becoming a successful trader,
investor and philanthropist.
He realised that
his main problem all this time had been that he was afraid
of losing, and that fear was just too expensive to let it
control his life any longer!
He had been playing not to lose, instead of
playing to win.
he would never again sell a property unless there was a
compelling reason to do so.
that he would no longer accept anything less than perfect
execution of his trading plan.
that he would take every trade entry signal his system
gave him and follow his trading plan as if his life
depended on it.
As if, after each trade
was closed out, he had to stand in front of a Panel of
super traders, and explain his actions to them - why he
entered where he did, where he placed his stop losses, why
he exited when he did.
And if they weren't
convinced he followed the rules of successful trading, he
would be taken out and shot!
This certainly focused
his attention on only trading strong trends - trends where
the price bars were trading above their respective moving
averages for long trades, or below for the moving averages
for short trades, and the Stock price was moving strongly
in one direction.
He pretended that if he
couldn't justify his trading decisions to his trading
Mentors, he was dead...
That was the day he
resolved to study his selected group of Stocks, the ones
that had a track record of trending strongly, every day.
He would then take every trade his system produced, put
his stop loss orders in the market as he entered each
trade it a place where the trend had to change to take
him out of the trade, and he would hold every position
until the trend changed.
He would act 'as if'
he was a great trader,
even though his record up to that point had been less than
That innocent question
from a child turned out to be the start of David's
successful trading career.
He started to trade
profitably and consistently for the first time in his
life. He thought he was doing well, and indeed he was
He knew from his
wealthy mentors that rich people are different; they make
rational decisions based on facts, not emotions. They
understand the value of money - they respect it as a tool
for building a better world. They buy well for logical
reasons and hold until there is a valid reason to sell.
Then one day, he closed
out a trade, and excitedly told his daughter, 'Daddy made
a big profit in the market today darling, come and look
and see what I did.'
His daughter came over
to the computer and looked at the screen as he excitedly
showed her where he had bought a Stock and then sold for a
$13000 profit. She looked at him and said, 'But daddy,
it's still going up, why did you sell now?'
His smile faded as
the power of that question sunk in...why had he
What was he doing
getting out of such a strong trend just to take a profit? What
would his trading Mentors say?
She was right...the
market was still open, so he bought back in again. He had
never been able to bring himself to do that before - he was
becoming a great trader!
The rally continued and
he kept buying more as it rallied. The trend finally
changed, but his profit on that trade, when he eventually
got a valid sell signal, was $34500!
simple, logical question 5 weeks earlier had been worth
That was the last time
he ever got out of a trade based on his emotions. His fear
of the market was gone - thanks to some simple questions
from a 7 year old...
So now, it's your turn.
Whenever you are
preparing to place a trade, find a small child, even if
you have to borrow one, and ask them what the trend is. Then
don't trade the other way!
If your trading isn't
as great as you know it could be, decide to create a
trading plan now that will become your life
Remember, fear is
just too expensive folks.
If you are afraid of
losing money, reduce your position size until your fear
Once you have made a
series of small profits, you will be trading with the
markets money and you can increase you position size
according to your growing confidence and account balance.
If you have a series of
losses, reduce your position size again until you get back
on the right track. Stick to your trading plan once you
have something that works consistently.
Then, just go out
and do it!
About The Author
- John is a successful trader who uses little known
trading secrets to time his market entries and exits. To
learn more about successful trading using these proven
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