Here is a photo from the Occupy Movement this month:

I am hoping this was a joke. If not, then see below.

While I can appreciate someone getting a degree in a liberal arts subject, didn’t anyone make this young lady take a class in Economics? Exactly what is the worldwide market for a degree in Hispanic, Transgender, Gay and Lesbian studies? What university took this woman’s money?

The Occupy Wall Street movement has spawned clones around the world. Unemployed adults, some families, a few Hollywood stars, all sitting in, hanging out, and complaining about the current wave of Robber Baron’s ruining their futures.

Here in Vancouver, BC, it looks like a lot of energy, with no clear message, targeting the wrong people. Cities are starting to force the protestors off of the public squares where they have been camping. Who should they be targeting?

First, who sold you this degree? If you bought a car with no engine, you would attack the automaker. If you got a $96,000 education from a university, with no clear way to repay your student loans, go protest at the university! Do they not have a stake in making sure their graduates can actually use the degree they sold them? How about a few class action law suits against the Board of Regents for allowing the school to produce worthless educations?

Second, Wall Street is a business. The finance industry operates in a regulatory environment. The governments released the tight controls from the 1930′s and built the financial system that has grown over the past several decades. The laws and meetings can all be traced back to the politicians and regulatory officials who passed the new rules. These people are NOT in Wall Street. They are all in Washington DC. Get a map and go there to protest. In the US, that means you need to talk to approximately 336 people who run the government for the people.

Third, this is a non-event. The press popularizes these gatherings like a massive wave of protest. Having gone by two sites, one in Oakland, CA and one here in Vancouver, BC, I can say, it is a small minority of disaffected people. I have seen bigger gatherings at a high school hockey game. Just be glad this isn’t a global wave of hockey fans trying to make a point. There would be a lot more blood!

Fourth, this is a sad commentary on the state of higher education. If this is a “movement”, then the universities need to get these people back in the classroom and teach them political history. Then the university should explain why they can’t get a job with the worthless degree they sold them.

Finally, while unemployment is high, capitalism is nothing but a tool, based on human nature and economic theory. Man uses tools for good or evil. Do not blame the tool for how it is used or exploited.

In defense of good old fashioned capitalism, more people are fed, clothed, and housed right now, than at any point in the history of the world. While a lot of people are still struggling, the bright shining beacon of hope is not communism, socialism, or any other failed social experiment.

The beacon of hope for the world is capitalism. With a stable financial system (this is the role for the bankers), minimal taxes (you need an incentive to work), a level playing field (this is the role of government), entrepreneurs (small business), and a strong work ethic, capitalism will allow the greatest number of people to feed their families and reach their individual dreams in life.

The Tea Party movement dwarfed this lost Occupy movement. Maybe the Occupy Movement should hire some consultants to get a clear message, and then spend some money to get there message out. Oh wait a minute…

MF Global is missing $633 million from their client accounts. The company has filed for Bankruptcy protection, and is being dismantled.

Currently, investigators are trying to take the company books apart and figure out where all of the funds are at. At the same time, the staff of over 1000 workers at the brokerage are being laid off.

http://money.cnn.com/2011/11/11/news/companies/mf_global_layoffs/

You can blame a lot of failures on the economy and the difficulties that have ensued. However, this failure is purely bad management.

http://en.wikipedia.org/wiki/MF_Global

A firm originally founded in 1783, it grew over time, and then evolved into the Man Group.

Eventually, the brokerage firm was spun off and founded as a separate company in 2007 during an IPO as MF Global. With the second largest IPO in 2007.

http://www.nyse.com/press/1184840344433.html

Now, with $42 billion in assets, and equity of $1.4 billion, it is a failed enterprise.

Some highlights are:
The Wall Street Journal reported that MF Global would seek Chapter 11 bankruptcy protection after investing $6 billion in sovereign bonds issued by European countries.

On October 25, 2011 MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds.

According to the CME Group Inc., MF Global broke rules on keeping customer money separate from its own trading accounts.

The MF Global bankruptcy was the the largest Wall Street firm to collapse since the Lehman Brothers incident in September 2008.

The biggest issue in my mind is; “Who do you trust?”

This was not a home town broker who bet big and failed. This was a large to mid-size player (depending on how you measure), that bet big and failed. A stock traded on the NYSE, and audited by PriceWaterhouseCoopers. Even if the players get their money back from the assets, it will take months (years?) to clear this mess up.

How long would your funds be tied up in court?

Could you withstand the financial blow if your investments were tied up in this type of action?

Do you trade or park all of your assets with one firm?

When we thought of diversification, we rarely thought of not using a single bank, brokerage, currency or even country. Now, in any weekend, you can wake up to the folly of a CEO having lost control of his organization and your money. You can go from a secure investment program to financial ruin in a weekend.

You have to maintain control of your investments. The facade that the major players present should not be trusted. When you are looking at the long term, remember the basics, diversity and proper risk management!

Depending on the size of your net worth, you need to ensure no single entity can bring you to financial ruin. Pain, maybe, but nobody should be able to ruin your future.

Remember, they are not watching out for you! That is your job. Only you can assume the risk, and the reward of your financial life.

What’s your name?

Dr. Barry Burns

What is you website address?

http://www.TopDogTrading.com

Can you give us a little bit of background about how you got involved in Trading and what led you to become such an expert?

I was a businessman and owned several small companies over the years. When I decided to make a career change I did a lot of research to find the perfect career for me.

It had to be something with enormous income potential. But I also wanted time and travel freedom – to be able to work when I wanted, where I wanted and only when I wanted.

Finally, I was pretty burned out on always catering to customers needs. I wanted true independence.

When my due diligence was complete, there was only one choice left standing: Trading!

My dad was a stock trader for 70 years before he passed away. So I had grown up with it in the household and my dad had taught me some things when I was a kid, but at the time I was more interested in karate and girls.

When I realized that trading was the perfect career for me, I started looking into it again and things had changes dramatically since I was a kid living at home. Electronic Trading was just coming on the scene and it was a very exciting time. The average person was more empowered to compete with the big boys.

I joined a local trading club and read every book I could get my hands on (over 100 eventually). And when I was ready to make the commitment to become a full-time trader, I called my dad and asked him to mentor me again. He agreed and I moved back in with him for a short time to become his student.

After that I put a lot of screen time in, and later found 3 more mentors who were willing to work with me. One of them was a floor trader in Chicago.

How long did it take to you to become really become proficient at Trading?

I went through years of being successful for a while and then losing again. In fact I found that just as there are cycles in the markets, there were cycles in my own behaviour and my trading method. Learning that cycle helped me be aware of when I was in a down cycle and to stop trading.

People focus on trying to control the markets, but that’s impossible. What they really need to do is learn to control themselves.

The owner of our trading club said in his experience it takes people at least 4 years to become a professional trader. I’d say that’s about right, although it varies dramatically from person to person.

What markets do you trade? Is there any reason for choosing them?

I swing trade and day trade. I had started trading stocks simply because that’s what my father did. Now I also trade futures, currencies and options.

For years I was afraid of the leverage of these other instruments, but now that I’m better at managing my risk, the leverage allows me to make so much more money. Primarily I swing trade stocks and ETFs and day trade futures and forex.

Would you view yourself as a fundamental or a technical trader? If both what percent to give to each?

I’m close to 100% technical trader. That’s all I look at. If I hear some good news regarding the fundamentals of a company, I may look at the company, but when I do, I’m looking at the company’s chart.

Are you more a systematic trader or discretionary trader?

My trading rules are extremely objective. Anyone trading my rules precisely would be trading the same way.

However it’s just a fact that people who master any skill or profession incorporate a lot of their experience into their subconscious. It’s natural and unavoidable. It’s like the master saying to the kid “I’ve forgotten more than you’ll ever know.” What the master has “forgotten” is not in his/her conscious mind, but that information is still at work in the subconscious influencing what they do.

Are there any specific strategies that you trade? Can you provide any details of them?

My strategy is very objective and scientific. I look for 5 market “energies” to align in the same direction and at the same time. The alignment of these energies creates a probability scenario that favors my position. It’s my edge. It’s what puts the odds on my side.

Those 5 energies are:

1. Trend (direction)

2. Momentum (trend strength)

3. Cycle (timing highs and lows for entries/exits)

4. Support Resistance (blockage to energy)

5. Fractals (looking at the bigger picture or scale)

If you are in a take-profit situation and your system is telling you to exit rather than hold on, how do you bring yourself to exit even if it’s still running in your favour?

Most of the time I exit with hard limit orders. They are placed before those levels are reached. I let the market take me out rather than depending on myself to make a split second decision and risk hesitating.

How do you react to the winning and losing streaks?

Winning and losing streaks are a natural part of trading. They are part of the “cycles” inherent in the market.

The key is to have stop losses in place to minimize your draw down.

Just as I place a hard stop loss in every trade I execute, I also have stop losses based on a percentage of my account for every day, every week, every month and every quarter.

If my daily stop loss is hit, then I stop trading for the rest of that day.

If my weekly stop loss is hit, then I stop trading for the rest of that week.

If my monthly stop loss is hit, then I stop trading for the rest of that month.

Likewise, I have trailing stops that work the same way. If I’m in a trade and I’ve made a lot of money, I’m not going to allow that trade to turn into a loser. I’m going to put in a trailing stop on that trade to make sure I lock in some profits if the market turns against me.

So too, I have trailing stops for every day, week, month and quarter.

If I’m up a certain amount in a day, and then I start losing money. I have a daily trailing stop that won’t allow me to give back all my profits for the day. If that daily trailing stop gets hit, then I stop trading for the day.

The same principle applies for the week, month and quarter.

This is one aspect of money management that is critical and I don’t see many traders utilizing it.

What is the most important part of that discipline? What is your golden rule?

The most important thing is to keep my losses small. Not all my trades are winners. But if I can keep my losses small, then I can keep trading until the big move comes along and I catch it.

To do this, you must be very picky on your trades. The #1 sin for most retail traders is over trading. My opinion is that the market is mostly a random walk. But periodically things line up to give you a high probability trade. It’s not a predictable trade as the market is never predictable. But it is a probable trade.

For me, this is when the 5 energies align at the same time as mentioned earlier.

The key is to be patient and wait only for those times.

Let the retailers (amateurs) over trade. We stand on the sidelines and watch them chop up their trading accounts and wait patiently for the real opportunities. There are plenty of good opportunities.

My slogan is to take “fewer, better trades.”

What kind of risk do you take on a position? When if ever would you increase this risk?

On a chart I only risk a bar to a bar and a half on my trades. So my risk is small. And even when my trades don’t succeed, I’m usually not even losing that much because of the way I manage the trade.

My rule is to keep my risk on each trade to no more than 2% of my account.

How do you handle your position sizing for each trade?

My rule is to risk the same dollar amount on each trade, so I adjust the number of shares/contracts to match that dollar amount.

What do you consider are the characteristics of a successful trader?

Psychology is the most important thing. I think the Mark Douglas books are excellent and should be required reading by everyone. I would highly recommend his books “Trading in the Zone” and “The Disciplined Trader.”

If you had one secret to give about Trading, what would it be?

There is no one secret, but I have several slogans I live by. I’ve been around trading for so many years now and heard so many things that I forget where they all come from, but they may be from Mark Douglas.

My favorite trading sayings are:

1. Successful trading is simply a business of not making mistakes.

2. The consistency you need is in your mind, not in the market.

3. Be like the Jaguar – crouching perfectly still, waiting for the setup to come to you, then pouncing without hesitation or thought. You only need 1 to feed the family.

The first two are about learning to discipline yourself, which is the key. Becoming a master trader is not about mastering the markets, it’s about mastering yourself.

The last one is about over trading.

Any further comments you would like to add?

If any of your readers would like to learn more about my trading methodology, I’ve put together a free 5-day video course which they can have by going to:

http://www.TopDogTrading.com/free_course.html

I would personally like to thank Dr. Barry Burns for taking the time to reply and provide some insight into his style of trading.

James Ramsay

Visit www.otrader.com.au for more interviews and a Free 20 trial of our Stock and Option Portfolio management Software

Q. What’s your name?

Gary Tanashian

Q. What is you website address?

http://www.biiwii.com

Q. Can you give us a little bit of background about how you got involved in Trading and what led you to become such an expert?

Well, I think expert is a strong word because I don’t believe anyone ever masters trading.  I have some things that work for me much more often than not however.

As for my background, it is actually in business as the owner of an American manufacturing company where I developed an interest in macroeconomics while niching the company’s successful place in the world.  From macroeconomics, I began looking at market sectors and the stocks therein.

I do not trade stocks exclusively on technicals, even though TA is probably my strongest area.  A given sector must be in alignment with my view of the macro landscape.  This helps me be a strong holder when necessary.  I find I would be a weak hand when holding something for purely technical reasons and frankly do not have the time to baby sit positions.  So also you can gather that I am more of a swing trader than flipper.

Q. How long did it take to you to become really become proficient at Trading?

About four years.  The bear market of 2000-2003 taught me that I was good at market timing; trading those huge bear rallies and declines.  It was like a meat grinder, but it got me attuned to the market’s rhythm.

Q. What markets do you trade? Is there any reason for choosing them?

At this moment, the gold market.  Specifically the gold miners.  The reason is simple, the gold stocks as represented by the HUI and the EFT GDX, are making what I believe is a historic bottom.  I am not necessarily bearish the US Dollar as measured in competing currencies, so I am not like the gold bugs who can tend to have an us against them mentality.

What I see when I look at gold’s ratio to oil, to industrial metals and to human hopes for prosperity is hockey sticks!  Just like what the USD did in October.  The same forces that drove up the Dollar drove up gold’s ratio to gold miners’ cost inputs!  It is the play of year and likely the start of a new bull markets.

I am also bullish broad markets for an extended trade, not due to fundamentals but rather due to technicals and historically bad sentiment.

Q. Would you view yourself as a fundamental or a technical trader? If both what percent to give to each?

Fundamental 40%, technical 60%.

Q. Are you more a systematic trader or discretionary trader?

Definitely a discretionary trader, using a good dose of instinct.

Q. Is there a certain instrument that you like trading? I.e. options, shares, warrants, CFD’s, futures, forex?

I mostly trade shares and once in a while a few puts and calls.

Q. Are there any specific strategies that you trade? Can you provide any details of them?

I am a bottom feeder, pure and simple.  I see an inverted head and shoulders or massive falling wedge with bullish divergence by indicators like MACD and RSI I get very interested.  I will also look for trend by AROON and confirm with Wm%R and when I see several indicators hinting at reversal, see a bullish pattern and some clear support and resistance points all showing a confluence toward a given outcome, I then pay close attention.  But I must be on board with the fundamentals as well.

If you are in a take-profit situation and your system is telling you to exit rather than hold on, how do you bring yourself to exit even if it’s still running in your favour?

I do not have seller’s regret.  Well, maybe just a little.  But it comes with the territory and emotion should not be part of the equation.

Q. Do you or your systems trade every single day?

No.

Q. How do you react to the winning and losing streaks?

Even keel.  Act like I have been here before.  The market can be very humbling so I may as well make an attempt at humility on my own before it is forced down my throat.

Q. What is the most important part of that discipline? What is your golden rule?

Keep that emotion contained.  I am not the genius I think I am and I am also not as dumb as some trades have made me look.  If you show up with a brittle ego, you are done.

Q. What charting systems do you use?

I use stockcharts.com.  I really do not watch live charts that come with my trading platform.  Again, I try not to micro-manage positions.

Q. What news/broker services do you use?

None, except as contrary indicators.

Q. What portfolio management / trade tracking software do you use?

Fidelity Active Trader Pro

Q. What kind of risk do you take on a position? When if ever would you increase this risk?

It varies.  Throughout the bull market from 2003 to 2007 I was pretty pleased with the fact that I managed risk at ALL times by generally keeping a 50% plus cash position and still doubled the bull market’s performance consistently over that period.

As a bottom feeder, I will increase risk at a time like now for instance, when the crowd is frightened.  Of course the opposite holds true as well and when the herd gets over confident, I decrease risk.

Q. Do you use stop losses and things like that?

Very rarely.

Q. How do you handle your position sizing for each trade?

It varies.  I generally have many positions and each position is weighed against the overall portfolio.

What was your best trading day/week/month? What was going through your head?

I am sorry, I cannot recall to that level of specificity.  But I will tell you what was going through my head; I just KNEW I was a genius, so I sold a bunch of stuff before the market taught me it wasn’t true.

Q. What do you find so good about Trading and the markets?

It allows me to match up against a massive, emotional and sometimes very predictable collection of other human beings.  It allows me to practice something that comes pretty natural for me, a contrarian outlook.

Q. Do you remember your very first major trade/win?

No.

Q. Can you recall your worst trading day? How did you deal with it?

Yes, I was on my way to get a root canal.  I checked the market in the waiting room on my Treo phone.  They called me in and I told them the procedure would be a welcome change from the day I was having.

Q. What do you consider are the characteristics of a successful trader?

1) Keep emotion out of it.

2) Keep emotion out of it.

3) Keep emotion out of it.

Q. If you had one secret to give about Trading, what would it be?

Keep emotion out of it.

Q. Any further comments you would like to add?

Thank you for the opportunity to give one trader’s view.  I realize there is a lot of sharp people out there with good systems that work more often than not.  My thing is basically just a good b/s detector, a firm view on sector fundamentals and charts.  I am actually quite simple as a trader compared to some folks who have really gotten this down to a science.

I would personally like to thank Gary for taking the time to reply and provide some insight into his style of trading.

James Ramsay

Visit www.otrader.com.au for more interviews and a Free 20 trial of our Stock and Option Portfolio management Software

I just had a new user ask how to enter an option trade into OTrader so I made this video to show him (you) how it is done.