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What is your analysis paradigm?

Here is a question for you. What is your analysis paradigm?

Do you conduct analysis to try to:

• eliminate moves in your favour that turned into loss trades?
• eliminate trades that immediately moved in the wrong direction?
• ensure that you don’t get out of a trade too early?
• ensure that you don’t miss out on juicy trends?

Your answer may be that your motive is none of the above. However, a mindset that has not learned consistency will automatically be trying to achieve these very outcomes, even though you may not be consciously aware of it.

This doesn’t occur in the conscious mind, over which you have some control. It occurs in the subconscious mind, which is the realm of habits formed from time-grown beliefs that are continuously re-enforced by the repeated enactment of the habits we form. The habitual actions are the manifestation of your beliefs. It is a closed loop system that cannot be broken unless your beliefs are changed.

Shifting from the paradigm of analyst to the paradigm of a trader requires a conscious decision to change and then an effort to complete a transitional process. The transitional process is required to establish new beliefs and to invent new experiences that are repeated to form new habits – the habits of a trader rather than an analyst.


  • Mark Rutter says:

    Pffft. Of course. Like most online trading spruikers you make it sound so easy. But it is not.

    And you neglect to say how exactly a ‘transitional process’ is developed or what it is comprised of … not to mention the hard evidence for the success of the methodology to which you obliquely refer.

    And you don’t acknowkedge the difficulty of managing our own psychology. Nor how much capital is required to effectively manage risk.

    As ever …talk is cheap.

  • Ralph says:

    Sorry Mark but the answers to your questions are on public display if you take the time to look at the SWS website the audited returns are available along with the capital requirements for each stratigy.
    Yes managing phychology is not easy but it is something we should all aspire to do what ever endevours we persue in life.
    I guess we can complain and feel sorry and think good things are only for other people or we can grab life with both hands and live it with gusto.

  • Gary Stone says:

    Reply comment to Mark Rutter

    Hi Mark,

    Thank you for your post.

    If I may reply to some of your statements which require a response:

    Like most online trading spruikers you make it sound so easy. But it is not.

    Firstly, I totally agree that it is not easy. I would encourage you to read more of my posts and I am sure you will have a different perception of what we do and how we go about it; as many others have. It is difficult to learn new things if you have a closed and biased mind.

    There is not one post on this Journal nor one line of copy on our company’s website that says this trading caper is easy. Quite the contrary; if you look closer at the almost 100 posts on this journal, you will get the overwhelming impression that trading the markets is not easy. In fact, that very often is my exact point!!

    And you neglect to say how exactly a ‘transitional process’ is developed or what it is comprised of

    The journal itself has excellent key word search ability, located in the bottom left hand corner of each page. If you enter the word “transitioning” you’ll find the following posts.

    If you are truly committed to learn how to transition I would also refer you to a recently published book called The Wiley Trading Guide. I was fortunate to be asked to write a chapter in the book and the chapter I chose coincidently is called “Sustained profitable trading – Transitioning to trading for profit.” This chapter specifically talks about transitioning ones mindset to think like a trader. You will find this book at all good book stores.

    And you don’t acknowledge the difficulty of managing our own psychology.

    The majority of the 100 posts on the Gary Stone Journal relate to Active Investment Psychology. In fact, I am often criticised for focusing too much on psychology! After a quick search I found 36 posts directly relating to psychology and another 14 posts that that have an element of psychology. You will find enough psychology content on the Journal to keep you going for weeks if not months.

    not to mention the hard evidence for the success of the methodology to which you obliquely refer.

    The hard evidence, as you call it, is in our Public Portfolios’ past performance. Currently we run three customer audited SPA3 Public Portfolios which I am happy to discuss.

    SPA3 Hedge Public Portfolio started on 25th January 2001. SPA3 (long only) Public Portfolio started on January 25th 2001 and SPA3CFD Public Portfolio started 30th May 2008. Each portfolio has been traded in real time and the trades are then published to our customers on the day that they are done. Customers have the ability to view the open trades in each of these Public Portfolios. The SPA3 (long only) Public Portfolio has also been audited by Deloitte and we are so open about our past performance that we actually make each and every trade available for potential customers to view on our website. We have nothing to hide and each and every trade (from when the portfolios were last updated – updated quarterly) is published on the website.

    Let me make it clear that SPA3 is not the ‘holy grail’ of investment – we’ve never claimed it to be the best. But what it does offer active investors is the highest probability way of achieving success. Does SPA3 have periods where it under-performs the market? Sure, but over a large sample or trades, markets and years SPA3 has proven to consistently out-perform the market. This has been the case since January 2001.

    Currently the SPA3 Hedge Public Portfolio is out-performing the All Ords index by 14.62 compounded percentage points per annum, the SPA3 (long only) Public Portfolio is out-performing the All Ords by 13.23 compounded percentage points per annum and the SPA3CFD Public Portfolio is out-performing the All Ords index by 14.09 compounded percentage points per annum (portfolio performance as of 23/09/2010). I don’t believe there would be another stock market educator in Australia that could display this type of detailed audited portfolio performance dating back 10 years.

    Nor how much capital is required to effectively manage risk.

    This is not on the Gary Stone Journal but it is in the products’ frequently asked questions section on the Share Wealth Systems website. You will see this question is the number 1 frequently asked question.

    You can also access this information in the product matrix graphical below

    I often use the word ‘journey’ when talking to private investors because we are all on a different path or part of a never ending journey when it comes to the investing in the markets. With the advent of the internet it has become extremely easy to share quality content with people all around the globe. I am truly passionate about helping private investors understand what it takes to become a successful investor. Hopefully if you spend the time reading the Journal you will gain that appreciation

    Can I ask that next time, if you have any concerns or questions that you post in a constructive way so others can learn.

    Gary Stone

  • mark rutter says:

    Yes you can ask and yes I will. Not quite convinced. Once bitten twice shy maybe but acknowledge the detailed defence.

    Just the time taken to do it deserves credit. Well done.

  • Michael O says:

    While I might not agree with everything posted here or any other site, for that matter, Gary at least makes me think. I have not (yet?) invested in his products but I have learned more from these posts than many other sites that are trying to entice you by showing you the “good life” that can be easily obtained by “just” buying their product. Maybe Gary knows, maybe he doesn’t, but he really gives away secrets of the trading game that many want to charge for.


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