Product Review: The 3 Biggest Mistakes Traders Make from INO TV

In this 2 volume DVD presented by Jim Paul & Brendan Maynihan (who co-authored What I learned Losing a Million Dollars) what they consider to be the 3 biggest mistakes traders make is covered in some detail. The format is with Brendan being the "straight man" an presenting the theory and advice behind Jim's colorful and entertaining stories and anecdotes.

The material is split into 3 main sections dealing with mistakes in the following 3 areas:

The Trading Process
Behavioral Problems
Emotional Problems

The pair go into some detail about losing trades and how traders make the mistake of "internalizing" and "personalizing" as well as the 5 stages of internal loss:

Denial
Anger
Bargaining
Depression
Acceptance

and how these effect trading.

Also discussed in some detail is crowd behavior and how panics and manias happen:

Crowd Behaviour + Fear = Panic

Crowd Behaviour + Hope = Mania

An interesting part is how a trader can become "a crowd of one" and exhibit all the emotional and behavioral characteristics of (the worst aspects of) a crowd.

In summary, this couple of DVDs are well worth a review, and from what is contained in them it seems like the book would be worth a read too.

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Our Rating (Out of 5):

Product Review: Market Wizards Insights presented by Jack Schwager

Once you get past the cheesy music, the obvious plugging of Jack’s books at the start (which are excellent by the way, and on our recommended reading list here), and a not-very-useful introduction, this one and a half hour DVD of a presentation Jack gave to over 500 traders has some great and useful insights into trading. Most of the material is in the context of what Jack learned as he wrote the Wizards books.

Some of the key subjects that he covers in the presentation include:

Trading your personality
Trying to achieve perfection
Why markets are not random
What is NOT important in trading
What IS important in trading
What beliefs are common to all successful traders including:
- It is OK to lose
- You need an edge to make money
- A method is critical
- You need to work hard at the right things
- Good trading is effortless
- Risk control before you enter a trade
- Discipline
- Independence of thought
- Confidence
- Patience

The questions and answers and the interview with Jack at the end also have some key information that is not included in the books and provides useful insights. Overall an interesting and useful presentation given in an entertaining way that is well worth the $19.95 monthly fee to access all of the INO TV content all on its own.

Our Rating (Out of 5):

Product Review: Secrets of Short-Term Trading by Larry Williams

This DVD presented by Larry Williams, would more correctly be called 'A Collection of S&P entry Techniques' although the information in the first half of the presentation is interesting and useful.

Larry talks about the following three important concepts:

1. The cyclical nature of ranges
2. The close in relation to 'large' range days
3. The close in relation to the daily range

In the first section the concept that the daily range for the S&P fluctuates between small ranges and large ranges is covered, with the practical upshot being that if you enter a trade after a number of relatively large-range days, then you will get 'stuck in the mud' with the following short-range days.

In the second section Larry covers how it is typical for the closing price to be nearer the high on large-range up days. This can be useful in designing systems that are good at taking small losses when the daily range is small, and then hoping to capture a significant profit when a large-range day comes along.

The last section talks about the close in relation to the daily range and how it can be a predictor of the overall trend of the market and where in the market cycle we currently are. A sentiment indicator that tells us whether we are at the start or end of a trend is also discussed.

The rest of the presentation is about other typical entry signals Larry uses (including his famous OOPS Entry), and it is obvious that he does not want to divulge anything about his exit strategies, or position-sizing techniques (since they are obviously the important parts of his trading methods that actually make the money). At one point he even says 'Exit techniques are proprietary.' as an answer to a direct question'.

To me this all goes to show that assuming a trading system = an entry signal is a common mistake, and that you should be spending most of your time investigating and developing exit strategies, and position-sizing models rather than concentrating on entries.

Our Rating (Out of 5):

Product Review: How you can be Right when the Crowd Loses, presented by Jake Bernstein

In this presentation Jake Bernstein talks in detail about how sentiment of 'the lowest form of trading life' as he calls individual non-profession traders is nearly always wrong, especially at major turning points in the markets.

With some humor he talks about how most indicators, methods, and individual traders "just don't work". He also shows many examples of extreme bullish sentiment immediately preceding tops and bearish sentiment bottoms. There are a lot of examples that repeat the same concept, but I suppose he is just trying to show it is not an isolated case, but a fundamental way that markets work.

The study of individual trader sentiment forms the basis of his trading philosophy which is to use sentiment as a contrarian indicator. You may be thinking 'How does he gauge the sentiment of individual traders so accurately?' and the answer is that he conducts a daily survey with a representative sample, and published his results called the Daily Sentiment Index (details here).

This seems like such a simple concept that it can't possibly be any good, but the data is available historically so you can test it out for yourself. It is also ironic that although each survey participant receives all the data, and knows exactly how it is being used, they still can't get it right - I suppose they all think that it is the other guys who are wrong!

Our Rating (Out of 5):

Product Review: Mastering High Risk Decision Making presented by Charles Faulkner

In this DVD which is a recording of a presentation given by Charles Faulkner, use of Neuro-Linguistic Programming (NLP) techniques and their applicability to decision making in trading are discussed. For anyone interested in how we can learn to make better decisions in trading this is a very useful presentation.

Firstly Charles covers common patterns and mental attitudes that exceptional traders share. This includes factors in the following areas:

Unconscious patterns
Personality alignment
Measurable and quantifiable evidence
Indicators
Emotions, beliefs and mindsets
Trading Strategies

In discussing top traders and how he has modeled their behavior Charles explains some key traits that are essential to successful trading. These include:

Top traders have a separation of understanding and action
Top traders attach to actions not emotions
Top traders concentrate first on managing risk
Top traders have excellent discipline

In order to have trading discipline it is essential to have well-formed goals and some of the key factors that contribute to a well-formed goal include:

Stated in the positive
Is congruent with your beliefs
Uses ‘Away From’ motivation
Utilizes mental rehearsal
Has specific entry and exit evidence

One particularly useful NLP technique that is demonstrated in the presentation is about creating a decisive mind which helps to resolve any negative emotions or conflicts about trades you are about to make, and this is well-worth your time to study and perfect.

In summary, this is a useful, interesting, and informative presentation on decision-making in trading.

Our Rating (Out of 5):

Product Review: Applying Breakthrough Trading Tools presented by Cynthia Kase

In this DVD which is a recording of a presentation given by Cynthia A. Kase, there is a great deal of useful and unique information about the application, improvement upon, and use of some common technical trading tools. The discussion builds and extends upon Cynthia’s excellent 1996 book 'Trading With the Odds'. The main reasons that this book was not on our recommended reading lists were that it is a little difficult to understand because of the statistical and technical nature of the indicators discussed, and also used proprietary indicators that were not well explained or divulged.

In this presentation the reasoning behind the use of the indicators, and more details about their calculation and application are revealed so that it is possible to take away some tangible and useful methods for improvement on the standard technical indicators.

Key concepts that are discussed include:

Adaptive trading techniques that take current market conditions into account
Range as a proxy for volatility
The exponential rather than linear nature of markets
Why the market determines risk

With an emphasis on profit taking and entries, this presentation is quite mathematical in nature and some of the slides are hard to read, but what Cynthia is trying to say is definitely worth putting the effort in to understand. Improvements and usage to the following technical indicators is discussed:

Moving averages
Momentum indicators
Bollinger Bands
MACD
Elliot Waves

For any technical trader familiar with the standard indicators who wants to go beyond them, this presentation is a good source for your own areas of additional study into technical analysis. I recommend reading up on the indicators listed above (and also about mathematical standard deviation and normal distributions) so you are familiar with how they work before watching this DVD.

Our Rating (Out of 5):

Product Review: New Samurai Secrets for Trading presented by Richard McCall

In this 2 hour audio CD McCall gives a very detailed and informative overview of the application of Martial Arts training and methods to the trading arena (although all of it is applicable to life in general). Even though this could be construed as a plug for his book 'Way of the Warrior Trader' it contains a much better insight into the material than a simple 'brochure' would provide.

There analogy for trading is that traders face financial risk in the same way a Samurai faced death in the normal course of their 'being who they are'. Managing stress is a large part of excellent performance and Martial Art is spit into 3 main parts based on mental discipline:

Psychology of Existence
Psychology of Action
Psychology of Recovery

The way you view your existence is a key concept in becoming a good trader, and performance of a Samurai was linked intimately to their desire to win, their system of fighting, the flawless execution of their techniques, and treating their actions as a pure (unencumbered) work of art. When you can do this a transformation occurs and you end up on the 'Winning Way' or true path.

The main barriers to achieving a seamless blend of 'correct' action are the 3 negative emotions:

Stress
Anger
Fear

These are generated because our natural 'fight or flight' instincts are not geared to inaction even when inaction is the best course. This causes stress and effects morale. Self-directed anger is very destructive and fear is a big handicap. The way the Samurai dealt with these emotions is through 4 motivational pillars:

Mortality Awareness - Accept the risk of what you are doing
Life Purpose - Do what you know you are supposed to be doing
Soul Passion - Use your passion to generate inner energy
Higher Goals - Have something to aim for that is beyond you

Self-perception is very important and also the understanding that you are made of 3 interconnected parts: Mind, Body, and Soul. Rather than delegate independent responsibility for each of these parts to independent institutions (Academia, Healthcare Industry, Organised Religion) a Samurai understands that they are responsible for these areas as a complete whole.

The 3 levels of reality relate to the Body, Mind, and Soul and are Simple Physics, Super Physics, and Meta Physics respectively.

Simple Physics is what is observable. Super Physics is an efficient form of Simple Physics that gives you an edge, and Meta Physics is using your spiritual energy in a way that gives synergy. Dealing with these things in concert and combination is a powerful force.

The Psychology of Action there are 6 core concepts represented by the A.C.T.I.O.N acronym. These are:

(A)ccept all possible losses

(C)enter yourself in Mind, Body, and Spirit

(T)rust your warrior skills and intuition

(I)magine victory clearly

(O)nly existing in the present to conquer fear

(N)ever stop or look back once you begin

Each of these areas is described in detail and combine to form a powerful framework for dealing with the actions you must take as a trader.

Last is the Psychology of Recovery which is essential for anyone who participates in the markets since we will all lose at some point in time. For a Samurai, losing normally meant death, but in the instance where they did lose and survive, they needed a framework to learn and become stronger from their failures rather than weaker.

There are 5 stages of grief that everyone goes through even for a 'small grief' like a losing trade. These are:

Denial
Anger
Guilt
Despondency
Acceptance

Grief effects all 3 components (body, mind, soul) so all 3 must be considered in order to learn from grief/mistakes and recover effectively.

The last part of the audio CD is about the 'Universal Laws' that exist in the universe and influence us (even if you do not accept they exist). These include the laws of:

Duality – everything must vibrate to exist
Cycles – nothing stays the same
Choice – you can choose how a situation effects you
Responsibility – you can choose to accept the consequences of your actions
Inertia – things will stay at rest unless you take action
Momentum – things will pick up speed if you do take action
Synchronicity – everything is inter-connected
Manifestation – laws will operate even if you don’t believe in them
Process & Action – everything is up to you

McCall deals with each of these briefly as well as covering some actual practical exercises one can use to deal with stress. This brief audio course certainly is worthwhile in its own right, and also achieves the desired aim of making the listener want to go out and buy the book for the 'full detail' about how Samurai skills can be practically applied to trading and life.

Our Rating (Out of 5):

Product: Review: Why Traditional Technical Analysis Doesn't Work by Grant Noble

In this 1 hour DVD by Grant Noble, there are some useful ideas about why traditional technical analysis doesn't work. The presentation is 10 years old, and the main body of what is presented isn't that useful, but there are two main ideas that are definitely worth thinking about. These are:

All charts should be adjusted for inflation and base-currency rates
Technical analysis applied to fundamental data can be effective

The whole presentation lasts for about an hour and doesn’t once mention position sizing or exits in much detail although he does say that knowing when to take profits is a key part of trading, but doesn’t go on to say how you should do it.

Two beliefs that are prevalent through the whole talk are that a) off-floor traders have huge trading implementation expenses to contend with as so must trade longer-term than floor traders and b) successful trading is all about making accurate predictions and having effective entry signals.

Another quirky idea is that it’s OK to have 12 or so indicators in your trading so you aren’t dependant on any one indicator being right. Which 12 to use is not covered and nothing is stated about what to do when they all contradict each other.

The discussion of historical cycles in the S&P 500 makes the normal mistake of “spotting” a pattern that has only occurred 3 times over the last 150 years and extrapolating from that what will happen in the future.

I haven’t read the book that Grant touts in the presentation (saying that this presentation is not a commercial) and I don’t feel inclined to after watching this talk.

My advice is to think about adjusting your charts for inflation, and possibly using some technical analysis techniques on non-price data. These may be areas for useful research, but you don’t necessarily need to watch this presentation to find that out.

Our Rating (Out of 5):

Product Review: Taking the New Step with Expectancy, Money Management, and a Lot of Discipline presented by Van K. Tharp

Although we don't usually write negative reviews since they usually say more about the reviewer than the product, in this case we have to mention that this CD-ROM is not worth your time to order and return.

It is an audio presentation from 1997 (so the material is probably pretty out-of-date by now) and the sound quality is basically inaudible. It also comjes with a pdf file that is a poor scan of what was obviously the handout from the original presentation. The material may be excellent (and probably is based on other Van Tharp products) but we couldn't tell because of the poor sound quality.

We heartily recommend other excellent products by Van Tharp here, but in this particular case I would definately give this one a miss. If I could have rated it zero I would have.

We have contacted INO TV support about this product and they are looking into it.

Our Rating (Out of 5):

Product Review: Getting In tune with Trading presented by Victor Neiderhoffer

In this pre-blowup presentation, Victor waffles on in an hour of so of totally useless rambling about tenuous connections between musical scores and market charts. With poor sound quality, and overhead slides that can't be read, only the constant piano playing (which is masked by Victor speaking over it) is worth listening to.

One to avoid at all costs.

Our Rating (Out of 5):

More reviews coming as we watch more DVDs...

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