Bill Johnson is the chief strategist for the options in the "21st Century Investor", conducts independent research, provides educational and consulting services. He has published six books on various financial topics, including options, individual stock futures and the Federal Reserve System. His two training courses in the "online" has more than 160,000 students worldwide.
Prior to that he was an active trade, a fundamental and technical analysis in the "Charles Schwab". He also wrote a manual on training and ran a week's training in economics, and option strategies, pricing and hedging for existing brokers. Bill received from the University of Central Florida Masters degree in economics in 1996. and M.B.A. Finance in 1999.
Jeff: As you are interested in trading in the market?
Bill: I have always been fascinated by the market and wanted to enter into this business over 20 years ago. I started working as a broker in the company "Blinder Robinson". On the day when I was adopted, they appeared on the front page of the magazine "Forbes" under the "blind them and rob them," after the alleged swindle of the shares. I refused to work (one way or another, they quickly went down) and went to another area of finance. Years later I worked in the finance department of the American Automobile Association (AAA) with headquarters in Orlando. I again became interested in the financial market for years after a research report on the hedging of interest rate, which forced me to resign and enter into a business broker. Thus, I am actively traded for more than ten years, although my interest in this started much earlier.
Jeff: What you are most attracted to trade?
Bill: First of all, I really do not consider myself a "trader" in the standard sense of the word. Instead, I usually hold positions for longer periods, and then hedge their risks through the options. Sometimes I go out of position via the option after a short period of time that allows me to consider a short-term trader. But I is not configured to open and close positions during the day or other short period of time. I love challenges, with hedging "risk" position. This is like a chess game against the market. The market is moving, then I will hedge their risks, he moves again, I hedge their risks again. You never know what will move the market and this creates excitement and intrigue that we all share. This also leads me to be in the never-ending search for additional knowledge, new strategies, market psychology, or any other information that will make me a more informed and a better player.
Jeff: How do you view the loss of psychological and downs?
Bill: I just accept them as part of the game. Traders, who play this game and wish that there were no losses themselves durachat. Losses are inevitable. What distinguishes good from bad trader, it is how they relate to losses. Some people want to play for money without losses, and earn more profit at the expense of greater leverage.
Many make the mistake of thinking because of the loss of what they are doing something wrong. Losses are not necessarily the result of hard, but try to avoid losses - it is really a serious mistake.
Jeff: Do you consider yourself technical or fundamental trader?
Bill: I use both, but I'm probably more fundamental than a technical trader. I actually used a much more analytical tools as my primary style is to hedging of existing positions. Although I am not a staunch supporter of the technical analysis, I believe, as many people believe in him, he is taken into account.
Jeff: There are hundreds of technical indicators that you offered to beginners, to avoid "analysis paralysis"?
Bill: I think the best - is to find some indicators that you understand and are suitable for your trading style and work with them. One of the problems of technical analysis is that, once found an indicator that works well, it immediately begin to use the mass and it quickly loses its advantage. This is forcing traders to invent new kinds of indicators that are more complex and then the cycle continues. This can lead to technical analysis can become very complicated and if you try to use every technical indicator, it does not increase efficiency but create a tremendous amount of work. If you stick to a few indicators that you are suitable, I think, that's all you need.
Jeff: What is your most unforgettable transaction?
Bill: One of the most memorable transactions was in 1996. Stock "Comparator Systems" (IDID). This was unheard for a company that she traded in fractions of cents per share, but two months later she began to rise without any news above $ 1. Then one day event closed with the all-time record volume of 50 million on Nasdaq, which I believe. Again, there was no news. I have never bought shares worth a penny, but I think that the news of record certainly impress the market and cause some concern. Thus, contrary to his rule, I put $ 10,000 in stock before closing. The next morning, after a slight lull, the action opens above $ 2 and continued to improve. Around noon, "fun" was over and she collapsed down. I put a market order, when it traded around $ 2.20. It was, so many orders to sell that I have not received confirmation three days! The execution was approximately $ 1.85, which was disappointing, but certainly better than the message "not implemented", which came to many of my friends, placed a limit - a warrant. The action, of course, as it turned out, was a huge swindle, and this is very interesting. The most important lesson, which I ordered from this, is that to make money in the market, you should not buy long-term market-based instruments, but merely the tools that other people think that they will grow.
Jeff: What you have a recipe that does not fall into emotional traps inherent in trade?
Bill: Psychological emotions - this is certainly one of the biggest problems when trading in the market. It is easy to say that you are willing to take losses, but quite another thing when it happens. I think it is best not to enter or in which the transaction in which you feel uncertain. This means that you must become a holding company that holds real assets (stocks, options, bonds, etc.) and feel confident with the amount of money which they are located. Any asset can be changed to go down. If you invest in any transaction within its risk parameters, to deal with the emotional traps becomes much easier.
Jeff: What are the mistakes most people make in the markets?
Bill: There are so many errors that I do not know where to start. To begin with, I believe that many do not properly understand the risk and reward, which leads to bad deals. For example, most traders will tell you that the market-based instruments, which is $ 4 and can grow to $ 1, more risky than a tool, which is $ 1 and can add $ 4. The one who is $ 4, less dangerous, because it suggests the market price and therefore correspondingly smaller compensation. Another problem is lack of understanding that there are two components in the selection of market-based instruments - the direction and speed. To be a win, you must assess the direction of market-based instruments, as well as the amount of time for which he reach the place where you expect. Most traders look for direction and does not take into account the time period, and consequently ends on losing side. There are also many psychological and mathematical errors. For example, most traders can not distinguish the ability of choosing market-based instruments of randomness, and continues to think that "marketmeykery" have complete control over prices. All etinepravilnye perception, as well as others, forcing people to make erroneous decisions and enter into a transaction waning.
based on Optionetics.com
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