Hi There

My book Bird Watching in Lion Country (First Edition) and my mentoring programme produced three out of three top places in one of the most prestigious real money trading competitions around, the FX Street Forex Trader of the Year international trading competition.

In 2007, towards the the end of the trading competition, I was made aware of the fact that the leading two participants were actually readers of BWILC and one of them was on my mentor programme. Obviously I was delighted. They ended first and second. As a consequence I was invited to speak at the next (2008) FX Street Barcelona Traders’ conference. It was a privilege and a pleasure.

In 2009 FX Street asked me if I would offer some prizes for the competition and I offered two mentorships valued at $1,990 to the worst performers. Both those prize winners are now on my Class of 2010.

About two thirds through the 2009 competition one of my mentoring clients informed me that he was in the competition and doing well and he told me he thought he could win it. Five weeks later he was declared the winner.

I have ambivalent thoughts about trading competitions. On the one hand I think they are just part of a scheme to generate trades for brokers hard up for trades (and thus revenue). Obviously from a marketing-to-the-gullible point of view it makes sense to be able to say so-and-so has made a fortune in record time under the pressure of a competition (and therefore you can do it too).

This is the big negative of trading competitions: They are too short. Luck plays a disproportionate role. You can’t make any long term conclusions from such short term performance.

Nevertheless, I think anyone serious about making something of his trading should take a second look at a real money trading competition like the FX Street competition as it can tell you a lot about your current trading approach and the state of your progress as a trader.

A positive of these competitions are that they don’t ask a huge capital investment on a live account. This allows you to test the boundaries of your #1 trading system under pressure conditions. It’s important because even if you aren’t trading month-to-month to earn your living from trading, you will, due to short term goals, experience periods of stress and you will have to perform during these periods.

A trading competition shows you something of the flexibility of your system, how much room you have to move in it.

The simple but profound question it asks you is this:

Are you in charge of your trading system or is your trading system in charge of you?
Think about that.
Most people are actually victims of their trading systems which are ill-conceived with no foundation in reality.

Is your trading system flexible?

For Formula One drivers there is a specific optimal driving line around the course. The cars are highly competitive making the playing field as level as it can be. Yet each driver retains the choice, the flexibility of when and how to use gears, acceleration and brakes, and this makes a huge difference to the outcome. Michael Schumacher didn’t win because he had the best car by far. He won because his choices were the best – hundreds and hundreds of little choices that he stacked up and built into an unbeatable edge.

How’s your trading system? Do you have flexibility? Does it give you space? Do you have choices? What about small edges that can all add up to an ‘unbeatable’ system? Can you, like Martin, the winner of the 2009 FX Street competition, decide two weeks before the end of the competition to change gears to overtake the others and win? Or are you sitting, frustrated and confused, looking at the screen, hoping for the next big signal that will save you from ending at the back of the grid? Is the only flexibility in your system the flexibility of gambling with a bigger stop loss, exceeding your risk: reward ratio?

A trading competition in itself doesn’t add much value to most participants. But if you use a trading competition as a part of your process to become a good trader you actually make it work in your favour. A trading competition adds healthy pressure. You set out to perform well over a specified period of time. This should however be part of a continuing process. It should be a type of culmination of putting everything together for the first time and putting it to the test.

I advocate that most trading systems are rubbish and most traders are copping out from using the most powerful trade generator in existence: their own brains. People enter trading competitions with the idea to be lucky and win the first prize, usually with a highly leveraged approach (compounding the impact of luck vs skill).

That’s not what you should do. You should put what you have learned to the test.

I am prepared to put this theory and idea to the test during the 2010 FX Street “FX Trader of the Year 10th Edition” contest.

Like I have said, to the best of my knowledge three BWILC traders entered the real money FX Street competitions in previous years and they came 1st (2007), 2nd (2007) and 1st (2009).

So I was thinking.

Why not give a lot of people an incentive to learn the ropes, drop the losing systems they have been fooling around with and prove it for all and sundry that the 4×1 BWILC trading approach contains several edges which are applicable under real trading conditions. For instance its flexibility.

Due to the nature of these competitions there is an element of luck involved. So I am not saying the challenge is to win the competition. (After all there can only be one first prize winner.) But, there can be many winners! Those who use the competition to better their trading.

For me the challenge is to show that even if a number of BWILC based participants take part the majority of them will outperform the rest. During the 2007 and 2009 competition only the top two and top three respective participants had positive returns. That’s 0% + 0.0000001. What a joke. The rest were LOSERS with their fancy ’scientific’ 3:1 risk : rewards, positive expectancies, let your profits run, cut your losses and don’t risk more than 2% of your account on any single signal, systems.

This is a breakthrough insight I got from studying the trading history of several hundred losers (sorry guys, but you were!): They all trade the same way! They either had absolutely no clue as to what they were doing or they were applying the “#1″ loser system I have just described. The only difference was the duration. Some did it for a few months only and others for a few years. Some tried once or twice others tried dozens of systems – all end in the same manner. FAILURE.

WHY? WHY? That is the question that preoccupied me. The answer is simple. These systems are fatally flawed considering the nature and characteristics of currency price fluctuations.

Easy as that.

Garbage in … losses out!

The challenge for participants would be to stress test to what extent they ‘own their own brains’ and have flexibility, a definitive edge and a sustainable trading system after a period of development of such a system.

Quality in … profits out!

Regarding the 2010 FX STREET TRADER OF THE YEAR CONTEST, here’s the deal:

1. You register to take part in the live 2010 FX Street FX Trader of Year competition.
2. You open a real money trading account of $2,000 or more (this is the minimum for the competition) at a Forex Broker of my choice before the end of May 2010.
3. You buy BWILC 2010 or provide proof that you have a legitimate copy.
4. During the next few months, until the competition begins I help you to master the BWILC trading principles and you go out and use the FX Street FX Trader of the Year Competition to prove to yourself that you can do it. And maybe you can win some of the great prizes too.

Keep in mind I don’t expect of you to do anything if you don’t want to in terms of live trading before the competition starts. So that gives you four full months (May – August) to prepare. That is more than enough.

Let’s look at that again.

I am happy to dominate this years FX Street FX Trader of the Year competition based on the fact that my previous three clients I know about came 1st, 2nd and 1st in the respective years and prove that the BWILC, 4×1, median grid trading system is superior to the fatally flawed “systems” almost all losers use.

I am also confident that the average rookie BWILC trader can beat the FX Trader of the Year average (achieved by non-BWILC-based-traders). Thus I am offering an opportunity to anyone with an interest in becoming serious about his / her trading this year to enter the 2010 FX Street Trader of the Year Live Trading competition before the end of May 2010. Open an account at a broker nominated by me and I will put you (at no extra cost and with no obligations whatsoever) on a preparatory program to BEAT THE LOSERS HANDS DOWN.

Click on this link for more information about the Trader of the Year Opportunity

It remains an interesting, and costly, fact that while most people of average intelligence acknowledge the role of randomness in markets, they don’t trade as if they do. Why?

One of the reasons is because (and this has been proven through experiment) our brains don’t like randomness. Period. They don’t want uncertainty, and will even compensate by creating patterns and order where none exists.

For forex trading this means that you are artificially imposing order on chaos. Now that’s fine if you are dealing with unruly children but it is going to cost you dearly if you are dealing with the EURUSD. How many times were your stops hit and then the market moved in your direction soon afterwards? That’s artificial order imposed on randomness!

It’s really, really simple. Read the rest of this entry

Recently a large and well-respected forex broker hosted the forex robot world cup (FRWC). The supposed idea was to get all the “top” forex automated trading systems (robots) competing with each other to find the cream of the crop so that you, the retail forex trader could benefit by buying one of these ‘top’ systems.

That was the supposed idea. The real idea was to sell more rubbish to an unsuspecting (or gullible) public. This would come in the form of $995 a pop for the “best” robots as “proved” by the competition.

So it all started with a $150,000 carrot to get computer programmers to give themselves out as traders and experts creating automated trading expert advisors. This created a nice big ticket “product” for the internet marketing boys to sell so they could boast about their last 6-figure payday on their next internet marketing video.

Why do I say this competition is junk? Here’s why: Read the rest of this entry

Everybody is up in arms over the CFTC’s 10:1 leverage proposal. The blogoshpere is buzzing with emails from forex brokers lobbying congress, the senate, the NFA, the CFTC. It looks like everyone wants 100:1 leverage back.

In September 2008 the whole financial business model of investment banking came crumbling down. Lehmann Brothers, which operated through two World Wars, several regional wars and several market manias and panics, was wiped out.

A few months earlier Bear Sterns, the fifth largest Wall Street bank collapsed and was bailed out with taxpayer money. What was the problem? Keep in mind these companies were at the pinnacle of the financial world. They generated a good share of the US GDP! In 2008 they paid over $60 billion in bonuses. Any market, any instrument, these guys could trade.

So what went wrong? In a word, leverage.They took on too much risk. They were leveraged too high. Simple as that! Read the rest of this entry

There is a rumour doing the rounds that there may be a little more than meets the eye to the new CFTC proposals to reduce leverage for retail forex traders from 100:1 to 10:1.

The rumour involves a turf war. The two rival gangs are futures brokers and forex brokers. The futures brokers are the Old Boys Club, the forex brokers are the cocky new kids on the block. Both are registered at the NFA, both are regulated by the CFTC, but at the moment there is only one winner – the forex brokers.

Forex brokers’ growth skyrocketed while futures commission merchants at best stagnated. It is estimated that 20% of forex trading in Japan is now done by people like you and me, little people, who were previously excluded from this game. A major New York based forex broker claims 150,000 live trading accounts and $600 million in client funds. Read the rest of this entry

On January 13th, 2010 the Commodity Futures Trading Commission (“CFTC”) issued a press release regarding its latest rule proposal for the regulation of retail forex transactions. The proposal seeks to adopt a new regulatory scheme to implement the CFTC Reauthorization Act of 2008 and limit leverage to 10:1.

This has been met with outrage from all quarters. Some are predicting the end of the retail forex industry (in the USA at least), others describe it as lunacy. If the stats are anything to go by, most retail forex traders are united in their opposition to the proposed CFTC lowering of leverage to 10:1 from 100:1 (which more or less supports the statistics -and my contention- that 90% of retail forex traders don’t know what they are doing most of the time).

My reaction to all the above? Yawn.

Listen fellow Bird Watchers, let me tell you why CFTC is going to “win” and why it doesn’t matter. Read the rest of this entry

“I purchased “Bird Watching in Lion Country” 2 years ago. At that time I was trading with little success and a lot of frustration. I quickly skimmed through the book looking for the magic system and indicators. Found none and went back to my old ways. When I was finally on the brink of wipe out and out of sheer desperation, I pulled out my printed version of BWILC. It only hit home hard when I let go of the nonsense 25 other trading books had put into my head.”

BIRD WATCHING IN LION COUNTRY (BWILC) has opened a lot of eyes to the fact that in the forex market there is one huge cabal where traders scurry and scavenge and generally only succeed to bolster that terrible statistic that only 1 in 10 makes it.

Have I got GREAT news for you!

After many many hours of thinking, planning, writing and rewriting I can now announce that Bird Watching in Lion Country 2010, revised, updated and expanded is at the final editing stage and will be released in time to be your companion during the leisurely end-of-year holidays and to charge your batteries to make 2010 your Year of Forex Trading.

If that news doesn’t excite you I have even better news. Read the rest of this entry