Stock Trader Man

Thank you for visiting my web site and the new unedited daily market commentary and trading advice. I will be publishing this pre-market report daily with updates as the trading day progresses. Let’s call it “Lou’s View!”

So who is Lou?

As my profile says I have 28 years trading and investing experience principally from London, then Sydney and now Brisbane. I have over those years dealt and worked with the world’s largest Hedge Funds, discretionary trading and managed funds.
My principal success was establishing and developing Refco Inc’ as Senior Vice President  in 1984 from a 2 man operation generating an annual income of $100,000 to over $15 million…so I guess I must have done something right!

In 1995 I immigrated to Sydney and worked at Fimat as manager of their European/U.S shift and was then approached by Bankers Trust Sydney. It was there that I again raised the company’s profile (however not to the same magnitude as Refco’s!) but indeed I greatly increased profits by submitting innovative trading ideas to the most respected traders in Australia and Europe.

TRADING PHILOSOPHY.

Here’s why 90% of speculators/traders  go belly up within 6 months.

Again like trading I keep it simple:

1/Do not ever change  targets. If it’s a buy and hold on a say, 5 year view then don’t exit the trade after 5 days because it made you a quick 10% profit;the same is true vice versa. Don’t confuse an investment for a trade and don’t over trade reacting to every price change(it’s called 01 itis). After all, you wouldn’t trade houses the same way as stocks.

2/When trading cut losses and run profits by placing “stops”, if you don’t then the market will very soon stop you from trading. Most failures,nay all failures are caused by people doing the exact opposite.It’s called money management and you’ll live to fight another day.M0ney or risk management is the single most important factor which prevents you being another one of the 90% failures.The greatest traders that are still trading 20 years later all have the same mantra, it’s called risk management.Traders such as Richard Dennis,Paul Tudor Jones, Tom Baldwin, Larry Hite (not Warren Buffet, he is the greatest investor) all still manage billions and they all say only about 30% of all their trades made money.If you only read one book about trading(and believe me there is an awful lot of dross out there) then it has to be Market Wizards(interviews with Top traders) by Jack D.Schwager.It was written in 1989 and still I believe is the bible of trading.

3/Do not “personalise” the market, it’s not out there to “get you” so remove any delusions of paranoia and stay emotionally detached.In other words do not go ecstatically high fiving it on a winning trade and equally do not get upset on a losing trade. There are more books written on market psychology than on food recipes….I like to think I’ve just summed them all up!

4/Price Action, this is my favourite.Look at how the price is reacting to both positive and negative news, again this where charts overide fundamentals(or funny-mentals as they are often called). May sound simple but buy stocks that are going up not down! “The trend is your friend”.I have bought many stocks that are actually now higher when the S+P 200 index was at 5,150 because I followed the all important price action.

My mantra is “keep it simple!” In my experience traders over-complicate trading and can’t see the wood for the trees. Also, don’t trade off newspapers otherwise you’ll end up selling them. My view on analysts is that they are very much like weapons of mass destruction, firms have them because everybody else has them. Anybody can say why prices moved in hindsight; it’s foresight that makes money by utilising the most trusted and profitable system….BAR CHARTS. Obviously “Top Down” and “Bottom Up” fundamental analysis is very important but I can assure you having dealt with hundreds of the most successful proprietary traders all over the world it is safe to say over 90% trade off technicals and charts. However with so many chart systems to use many over complicate the signals by simply using too many, such as candlesticks (apt they use the term “hang man”) or Bollinger bands (use that and you’ll never be able to afford it!).

I use bar charts and the application used and known by seasoned traders as “Fibonacci”. In fact readers of my previous daily reports while I was with my previous firm  would have had the opportunity to be educated about the Fibonacci philosophy in relation to trading. Indeed, the response to all the daily reports spoke for themselves. After just 3 months the firm’s website went from 300 hits per day to a few thousand, it was commended by all clients,financial planners and indeed many “outsiders”;indeed I even enjoyed it  being plagarised! It certainly drew much attention, indeed  CNBC  invited me on their business show to talk markets. It was most certainly  cited by many as the reason they traded with the company.

I have been writing daily market reports for over 25 years with a readership of literally thousands from the professional trader to “Mum and Dads”.  I have frequently rejuvenated and re-wrote many companie’s old “cut and paste” way of “writing” reports to a subjective, informative and advisory one….without the “spiel”

I trust, like so many others before you, that you will find my reports informative, comprehensive, educational, profitable and indeed amusing.

I appreciate your visit to my site.

Please feel free to send me your comments/views. As I have always said, “In life, never take yourself too seriously, only the markets”

Best regards,
Lou Muddaris.