No matter how skilled a trader may be, regardless of his track record -- to demonstrate a real-time trade before an audience is to risk falling flat on his face.
Yet Dick Diamond routinely does exactly this with his trading students. He doesn't just talk -- he shows them how he "practices what he preaches."
He preaches and practices his famous 80/20 trade -- it's the only trading set-up he will take. As the name implies, this set-up offers what Diamond believes is an 80 percent chance of a winning trade.
There must be "something to it" because Diamond has made a living trading the markets for 4 decades! (And counting.)
If you want to improve your trading, consider what it means to learn from a professional trader who has that kind of track record. (I'll explain how you can directly benefit from his trading knowledge in a moment.)
But understand that the 80/20 trade is a ratio -- it implies that Diamond teaches students to shun trades which offer less than an 80/20 chance of success. This takes discipline, because marginally attractive trades come along more frequently than the high-confidence trading set-ups.
As the title of this article suggests, I want to share with you a few nuggets from Diamond's December 5-8, 2010 Trading Seminar manual. I can't give away the store, but I can provide some. Here they are:
- Stocks that are positive early and can't hold their gains are frequently good short candidates.
- Don't buy because prices seem too low or sell because prices seem too high
- Strictly adhere to technical data. Do not consider economic or corporate fundamentals.
- Trade the chart and the indicator -- not the money in your account.
- Nothing is harder than to try to pick a top or bottom. Instead, go for a buy or sell zone.
- Trade into the "white heat." If they want them, sell them. Better to get out when you can instead of when you have to.
- Never have a position in anticipation of a major report.
- If you are trading a 5-minute chart, use the 30-minute to gain additional perspective
- After the market has been in an extended trading range for 3-4 days, expect a big move up or down when it comes out of that range.
These are just a flavor of the Trading Principles he shares in his seminar. The truly instructive part is when Diamond gets into the nuts and bolts of his technical indicators, and the "how to" of executing a trade.
The manual referenced above also includes:
- 6 vital statistics that move the market and where they can be found (p. 47)
- The only time when you should consider taking "larger positions" (p. 37)
- When you are most vulnerable and prone to breaking trading rules (p. 24)
- What you should do when the market is in a trading range (p. 43)
- What to watch for in Moving Averages which indicate an explosive move is imminent (p. 91)
The manual is 174 pages long, and includes screen images of trade set-ups and graphs.