Über die Autorin bzw. den Autor

Thomas Busby (Mobile, AL) has been a professional trader and broker for 25 years, working with Merrill Lynch and Smith Barney. He is a member of both the Chicago Mercantile Exchange and the Chicago Board of Trade. Busby founded the Day Trading Institute in 1996 and it has grown into one of the most successful trading schools in the world. The school operates out of a 10,000 square foot facility and has trained more than 5,000 traders. One year after taking the DTI course, about 70 percent of the students are still trading, one of the highest success rates in the industry.  After enormous success early in his career, Busby lost almost everything in the 1987 stock market crash. Following that experience, he developed a low-risk, short-term trading method, which consistently generates profits and is the basis of the Day Trading Institute curriculum.

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Praise for Trade to Win

Tom's book Trade to Win brings discipline to the art of trading and teaches us how to block out the static and concentrate on what's important to be a successful trader. Anyone wanting to learn how to be a successful trader needs Tom's insight into futures strategies and market psychology to maneuver through today's markets.
―Norman Blake, Sr. Vice President, Stanford Financial Group

A good read for any investor. What I found most valuable was Tom's discussion of trade management. Post-trade decision making is critical for successful trading.
―Alex Jacobson, Education Officer at the International Securities Exchange (ISE)

In Tom Busby's newest book Trade to Win, Pearl of Wisdom #6 advises the trader 'Do not worry about the direction the market goes. Go with the market.' As a marginally successful stock trader for several years, I have painfully learned the frustration and difficulty of adhering to this seemingly simple, yet elusive rule. Tom's methods, classes, and books have helped me tame emotional trading and achieve much needed hope and success. This newest book in the DTI arsenal is another valuable chapter in my trading education and anyone seeking success in trading will profit from Mr. Busby's wisdom, experience, and trading discipline.
―Charlie Prince, President, Prince Marketing Inc.

This is a real hands-on for all new traders to gain knowledge of the life and psychology of veteran traders. It provides the skills needed to survive in today's volatile markets. I highly recommend this book.
―Fausto Pugliese, President, CyberTrading University

Aus dem Klappentext

Trading to win is a mindset.

Those who succeed in the financial marketplace are the ones who expect to do so. They learn about the markets, they work at their craft, and, as markets and technologies change, they change with them.

Nobody understands this better than author Thomas Busby. Over the years, he has traded an array of products, including equities, futures, commodities, precious metals, ETFs, and options, and, in so doing, has developed some sensible moneymaking strategies. Now, with Trade to Win, you have the opportunity to learn from a professional trader who teaches from the experience of doing daily battle with the bulls and bears of today's financial markets.

Divided into three comprehensive parts, Trade to Win opens up by explaining the fundamental elements of Busby's trading approach. It deals with the significance and use of time, key numbers, and market indicators, and discusses how these elements of trading work together to help you properly "read the tape" and understand the language of the markets.

Part II moves on to detail specific trading strategies. Here, you'll find strategies for trading stocks, options, futures, and other financial products. Some of the strategies outlined exploit market inefficiencies that are created as trading shifts from one major time zone to another, while others will allow you to profit from the interdependence among market sectors. Rounding out this in-depth look at making it in today's markets, Part III of Trade to Win goes beyond the numbers to address a few of the often overlooked aspects of this endeavor, including risk management, money management, and the impact of emotions on your trading.

If you're looking for a trading system for all markets, you won't find it here. In fact, you won't find it anywhere. Systems don't work because financial markets are always in a state of flux.

And it's not only prices that move, but also the general economy and the mindset of traders that change. The only way to be an effective trader over the long-term is to learn and adapt as things change. That's what thisbook is all about, and the information you findthroughout these pages will allow you toachieve this goal and improve your overalltrading consistency and profits in the process.

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Trade to Win

John Wiley & Sons

Chapter One

I was in Las Vegas. The year was 2003. I was conducting a seminar at a large financial event attended by traders and investors from around the country. The attendees came to the desert hoping to learn more about the markets. I was standing in the front of the room finishing the last details of preparation for my presentation when the crowd began to gather. I could not help myself; I began eavesdropping on some of the conversations. In my defense, it was almost impossible not to do so because the capacity-filled room of 1500 participants seemed to magnify the voices near me. Repeatedly, I heard the same refrain echoing around the dimly lit room: the bursting tech bubble in 2000 had been devastating. Noting the gray on their heads and lines of wisdom on their faces, I realized that many of these attendees were either retired or approaching retirement. They had apparently trusted professionals to handle their investments. As the new century began, their portfolios were heavy with techs and dot-coms. With the high-tech sector experiencing such meteoric gains, the folks in my audience had been relying on those investments to fund happy idle days filled with gardening, cruising, playing with the grandkids, and just enjoying life. Then the dot-com crisis destroyed their plans.

On March 10, 2000, the Nasdaq hit an intraday high of 5132.52. The bulls had been pushing prices up since 1999. Investors and traders loved the Internet technology that led to the formation of many dot-com companies. During the year before the crash, market value in the tech-heavy Nasdaq had doubled in value. These listed corporations offered a variety of products and services-some practical and some not. Many of them did not follow traditional business models. Even those that had never turned a profit attracted investors and dollars flowed into their coffers at unprecedented rates. Just one year before the bubble burst, I boarded a bus in Beaver Creek, Colorado. I was taking a short hop from the slopes to my lodge. While I was on the bus, a popular dot-com company moved up 10 points-10 points in value in minutes. That particular Wall Street darling that enjoyed the spotlight in the late 1990s is now defunct. Few of today's traders would even recognize its name. Based on the conversations I was hearing in Vegas, some of the money lost in the dot-com fiasco had obviously come from people sitting in front of me.

On Friday, March 10, 2000, investors were happy. Their high-tech gamble seemed to be paying off for them. Then Monday, March 13, came. The U.S. markets gapped down at the open and headed south. Initially, the drop was not excessively dramatic-about 10 percent loss of value over the course of several days. Many analysts hoped that a correction might be good for the markets and prices would stabilize. But the bears were relentless and the fall did not end. Tech stocks continued to decline in value for many months. By October 2002, $5 trillion in market value in tech stocks was gone. Month after month high techs experienced a slow but steady downward bleed. As Figure 1.1 depicts, the Nasdaq took a beating in 2000 and has not recovered to precrash levels. In fact, at the time of this writing, it has not even recovered to the 50 percent level.

I remember going to Cozumel the year the bubble popped. I met a man from Florida who was a police officer. He was living it up, enjoying the sun, smoking expensive cigars, and bragging about his investment in an Internet company. He claimed to have bought some stock for $10 a share, and he said it was currently trading for $200 a share. When I asked him some basic questions about his investment, like the products and services the company produced or provided and other such simple information, he looked at me like I was a fool and admitted that he really knew little about it. His investment was a great one, and he was holding on to it for the long term. It was his ticket to wealth. I remember thinking that the policeman was evidence that the bubble was about to burst. If a policeman who admitted that he knew nothing about the stock market was seeing his Internet investment go from $10 to $200, something was about to happen and it was not going to be good. When I think of that guy now, I wonder how his investment was faring in October 2002.

I suspect that the Florida cop crashed and burned like so many others. Clearly, a lot of the folks in the room in Vegas were also on the losing team in 2000. I heard them speak of portfolios cut in half and retirement funds wreaked. As the stories were repeated, many admitted that they had listened to fast-talking brokers and advisers who lured them into feelings of security and trust. They asked few questions and lived to regret it. This was not a happy group. They were skeptical, and with good reason. They and their portfolios had taken a beating.

As I started my presentation on that day in Vegas, it was important to offer them some good advice. I wanted to help my listeners make money and regain confidence in themselves and their abilities. I believed that I had some valuable information to share. I identified with the pain in their faces because I, too, had personally experienced the devastation of a huge financial loss. Not in 2000, but years before. As the room in Vegas came to life, I remembered those terrible days.

On October 19, 1987, I was living in Oklahoma City working as a vice president for a large brokerage house. At that time I had been a broker for a number of years specializing in trading futures and options. In fact, I was one of the largest retail options traders in the United States. With the right play, a lot of money can be made in options. But greed and mistakes can be costly. The month before the crash, I assisted my biggest client in making a million dollars. That is a million dollars of green in one month. On Black Monday, he lost that million and much more.

Making money seemed so easy before that fateful trading day over two decades ago. On August 25, 1987, the Dow Jones hit a high of 2722, and the markets seemed unstoppable. When I left the office on Friday afternoon, October 16, I thought I was king of the mountain. I, a small-town boy from Mobile, Alabama, was beating Wall Street. Little did I know that within a few days the Dow Jones would drop more than 500 points and lose more than 22 percent of its market value! In fact, such a thought was unimaginable to me. Friday's market had been very active, but I saw no signs of collapse. When Monday's trading began, I initially saw no signs of panic. However, a real sell-off came in the afternoon and the madness began. From those highs in August (2722), prices quickly tumbled to a low of 1739. The huge drop in the United States reverberated around the globe. To the north, south, east, and west the pain and panic spread. A look at the Dow Jones chart visually depicts the 1987 crash. The numbers cannot begin to convey the pain suffered. Figure 1.2 captures the dramatic price drop that translated into financial disaster for me and for millions of others.

Many folks view Black Monday in 1929 as our market's most severe crash. In fact, in 1987 the financial markets experienced their greatest single-day percentage price drop in our nation's history. It is true that the long-term effects of the 1929 crash...