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“Provident Investing” begins with this forward:
Book origin… 2013, Bob Robertson
My first foray into the world of commerce began many years ago when I was in the 5th grade in a small western town. I built a small table out of an orange crate and sold bags of popcorn outside the town’s one movie theater. This was in the late ‘40s, before refreshments were served inside the theater and it seemed a good way to make a few bucks. Some smart aleck 7th grader asked one night if I was making any money and I proudly pulled a handful of change out of my pocket, to which he asked, how much of that is profit? I went home that night and asked Dad, “…what is profit?”
Provident Investing was a title chosen for this book, as profit follows from prudent planning and economical investing.
That’s what this book is about. To profit from any endeavor in this life requires an edge! That edge may be gifts the good Lord has endowed us all with, talents, brains, beauty, a humble spirit, etc. Certainly good connections can provide a needed advantage. And the edge may be a powerful work ethic to stay ahead of the game. That’s life!
But the greatest edge any of us have is the freedom to find and develop our own strengths or gifts. This is very evident in the market, where a unique playground/battleground provides the freedom to take risks, to try, to fail, to learn, and to try again. Mistakes have been said to be the mother of all learning and we’re continually reminded of that fact in the stock market. The joys, the aha’s and the personal growth that follows post-mortem review of mistakes contribute to our continued growth. This book guides you to greater growth.
If you are a beginner in this field of commerce, then this book is for you. I’ve written this for beginning traders in the stock market. The difference between investing and trading can be cloudy, but consider this: A Day-trader may make hundreds of trades during a market session, with none active at day’s end. Whereas, a long-term investor may put his/her money into a growth stock with recurring dividends and not look back for 10 or more years. Between these two extremes lay the target of this offering, e.g., Swing Trading, Position Trading, Trend Trading, Rolling Stocks, Surfing, etc., etc., where positions are held from a few days to a few weeks. This provides plenty of action as the learner works his/her way up the learning curve without being tied to a computer screen all day. One can hold down a full time job and still engage with an evening review of market action.
A computer and good charting service are essential for the message in this book. We’ve adopted the web site www.freestockcharts.com as a free addendum anyone can access. It is a child of the popular data and charting service, TC2000, by Worden Brothers (Worden Brothers, Inc., Five Oaks Office Park, 4905 Pine Cone Drive, Durham, NC 27707). The lessons and exercises in this book can all be handled by this free service, although any popular charting service will suffice.
Each chapter in this easy to follow book, provides vital tenets for a profitable trading experience. We recommend you read each chapter thoroughly, marking the text as you go with notes, comments, observations, questions. If you want to move ahead at a faster pace you can go right to the last chapter, 9 – “Let’s Trade,” to exercise trading skills out of the gate. If you take that tact, read and re-read the other chapters while you trade, coming to grips with what parts of the book relate better to what your function and purpose is. Do not miss the edge highlighted in each chapter.
It’s been said the market is random. That is, there is no meaning to the ups and downs, the hiccups and convulsions; it is random as in a throw of the dice. Any edge is then short-lived and really of no value in the long term. But consider this example:
A throw of the dice is a truly random event. There is no way to gain an edge, betting that some number will come up (assuming it is a fair die). Remember when we used to play Rock-Paper-Scissors with a friend? We could gain an edge if we knew our opponents tendencies, that is, did he/she always use Rock at first, etc.?
Clearly, much is on us, learning stock patterns and market behavior, pointing to more likely probabilities! Our greatest edge is not in knowing what the market will do next (the outcome of any trade is unknowable), but knowing what we will do based on whatever the outcome. Our edge is an indication that a high probability event may take place, with the odds in our favor before we place the trade.
With all this preparation, many trades will fail. Losses are the cost of doing business, or the money we need to spend to make ourselves available for the winning trades. Make no mistake, trading can require a lot of effort, but with work comes the reward. Many very successful traders have fewer winners than losers! But they have learned to maximize winners and minimize losses through protective measures. We address those measures in this book. Take a look at what this book offers on the “Provident Investing Products” link at the top of this page.
And so, to you garage mechanics, students, business owners, soccer moms, government servants, ranchers, school teachers, retirees and all the rest who believe in the American dream, welcome! You are endowed by your creator with all you need to do better, to be better, and to take charge of your own destiny. If market trading feels like it should be part of that, this book will guide you there!
“The things I want to know are in books; my best friend is the man who’ll get me a book I ain’t read.” Abraham Lincoln
Learn how Options traders magnify their leverage in our book “Provident Investing.” Get the Traders Edge!
Additionally, take advantage of the 24-hour trading clock offered by Forex, a remarkable feature covered in Chapter 8.
Plus, the most important message in the book, Money Management, Chapter 6! “What is this thing, “Position Size?”
In a word – INSIGHT!