The Insider’s Guide to Achieving the Trader’s
Edge
Investing Pro’s give you the hard truth on your trading. We have asked our customer
base to participate. Some of them are long time associates of ours due to the fact that
we started our business in 1996. As you can imagine, we literally have tens of
thousands of people to query in our database. Some of them are very active and
successful traders and some are just starting in the business.
We ended up with over 1,000 questions that people wanted to ask trading pros about
their trading. The questions ranged from Forex, futures, stocks, options, day trading,
or swing trading. We will discuss the most pertinent and reoccurring questions. There
are certain categories that come up on a regular basis.
The topics that you will learn should make a difference in your trading regardless of
what trading system, strategy, or approach you are using. A lot of what is going to be
discussed is universal to your trading. Whether you are struggling, just starting out,
or you have had some success - you are going to benefit from what you learn today.
To help answer those questions, an informative collaboration has been brought
together composed of Mark Soberman, Brian Short and Troy Noonan.
The Speakers
Mark Soberman is the long time founder and owner of www.NetPicks.com. He founded
the company in 1996 and is in his 13th year of operation at the time of this writing
(01/2009). He has always focused on active individual investors. As you can imagine, in
1996, he was in one of the best bull markets ever and worst bear markets ever.
Now, they are in some of the most challenging markets on a global basis. We have
always been working on systems, approaches, and strategies for people who are looking
to day trade. Also people who are very actively working swing trade. Typically, it has
initially started in options and then moved into stocks, futures, and now Forex. Our
flagship product is the Universal Market Trader.
The Universal Market Trader is the strategy and course that’s designed to trade
multiple markets in multiple time frames. It is extremely dynamic across all the
marketing conditions that we have been experiencing over the last 13 years. Before
that, he took his first trade in 1984. He is in his 25th year of taking trades. It took

him his first 10 years for him to get the point to where he was trading with profits on a
consistent basis. That is often common with most traders who have worked
independently and grown their own systems and strategies. Part of the reason it took
awhile to make profits is that there are so many challenges. It is his hope that his
expertise will prevent you from having to make the same mistakes.
Soberman's first trade was an options trade that was successful. However, he felt it
was the worst thing that could have happened. Immediately, from the start, he
developed bad habits, and it took him quite some time to learn to break those habits,
how to deal with the mental struggles of trading, how to do proper risk management,
and to develop his system. When he started NetPicks.com, it was finally the light at
the end of the tunnel. In addition, they became very successful.
Brian Short is also a general partner of NetPicks.com. He has been involved for about
6 years and has had the opportunity to help and assist with development of some of the
strategies that are used at NetPicks.com. His trading background extends over 20
years. He has always worked in some sort of investment from longer-term 401K
positions, and he spent most of the 1990's using broker recommendations. He found
that relying on other people to guide your portfolio was good for awhile, but,
admitted, it took a bit of a dive.
He is excited to discuss with us his current work with inter-trade trading. He has
control over his destiny by empowering himself with a method that gives him an edge in
the market. His results don't mean that he wins every day, but, instead gives him
consistency with his trading plan. It has proved to be a personal success that shadows
the advice that he imparts.
He uses the Universal Market Trader on a daily basis, and it has allowed him to identify
some of the stumbling blocks that traders have. Relating to his own past experience,
he identifies with these traders and has worked with many of them to become
successful traders.
Troy Noonan joins the panel as a former student of mentor Brian Short. He was an
actual trader that Short met through the NetPicks.com Universal Market Trader.
Noonan started trading in the early 1990's when he was still excited to receive his

paper charts in the mail every day. The internet was still in its infancy and the trading
world had not yet become high tech. He struck gold trading a pound against a dollar
with a futures contract at a time when the pound was falling off a cliff against the
dollar.
He took his winnings and traveled through Europe and traded along the way. He was
hooked and that is how trading became a part of his life. Eventually he came to know
NetPicks.com and became a user of their systems. Ultimately he was asked to join the
team and now works as a NetPicks.com coach. He also moderates a trade room for
NetPicks.com and also has the experience of dealing with a lot of traders. Noonan has
often heard common themes amongst traders that he can identify with because he has
lived through those same issues.
Question: What are the three biggest mistakes you've made?
Soberman: I think this is a great question because when you are learning and looking
for information, you get sold a lot of claims and systems that insist that you are going
to win 100% of the time, that you will take $1000 and make it 1 million dollars, and
other hype sales copy. It's easy, as traders in a newcomer's shoes, to fall victim to
that kind of ads. They are appealing when you are new or struggling with your trading.
You have no reason to doubt that it can NOT happen. The reality is that this is one of
the biggest mistakes I've made. They are buying into the unrealistic claims that are
made about trading.
There is no doubt that you can be very successful with your trading. That you can
ultimately have it become your living. However, it does not happen with 100% winners
and you are not going to turn $1000 into 1 million dollars in six months. These things
are not realistic and you are going to save yourself a lot of time ignoring all of that
hyped noise that you tend to hear. They listen to this instead of just focus on trading
systems and strategies where you are going to hear realistic things.
What I mean by realistic are win/losses that are above 50%, average gains that are
bigger than the average loss that are not succeed every single trading day or every
single week. However, they are consistently profitable but with equity curves that go
a little up and a little down. That is realistic trading. There isn't really anything else

that's realistic. You would save yourself thousands in investments and strategies if
you would ignore the ones making the most extreme claims. I have never found ones
that live up to those claims.
To summarize, the biggest mistake I made was buying multiple trainings, etc, that just
seemed too good to be true. At the time, I really wanted to believe it. Another mistake
that I made was that once I was on a good approach or strategy, I was never satisfied
with the modest win rate that I referred to of 50%. Often, I would dump a strategy
just because it didn't win every time. I always thought there had to be something
better. I left some systems that really would have served me well because I was
pursuing some systems looking for the Holy Grail.
The final mistake I made was risk control. Even when I was on to something good, I used
crazy risk. I remember with some of my accounts trading 4 or 5 full-size S&P contracts.
Not minis but full sized with the floor. At that time they may have been $40-$50,000.
If you are familiar with the leverage, that is a crazy risk. When I took a loss and my
risk was 8 points, I would start risking 8-10% of trade. Back then, when you were
training on the floor, the executions were sketchy anyway, and it was a really big
mistake. Even if my system was good, I was going to fail because I did not have proper
risk control.
Short: I actually have 4 big mistakes that I have battled with over the years. In the
past, I traded for Forex for about 5 years very actively. I was into day trading futures
markets over the past 3 years. The first issue I had was risking way too much on each
trade.
In the Forex, specifically, it is so tempting with the margins that brokers give you of
100 to 1 (some cases even higher than that) to over-leverage yourself. Initially, you
take a look at the trading etymology and you look at how much you can make at the
Forex specifically, and you think to yourself that you can risk 10-30%. In some cases if
you get a winning trade, it's probably the worst thing that can ever happen to you. It
reinforces a habit that is going to become the demise of your trading. That demise will
come from risking too much.
You need to get that under control and, my recommendation is you need to risk a

conservative amount. Either 1-3% per trade depending on the method you are using.
What that does is that it keeps you in the game when you have those series of losing
trades. Believe I don't care what the method is; you are going to have that series of
losing trades.
That will define you as a trader - how you react to that sequence and what you do
about it. Proper risk, however, will keep you in the game.
The next big mistake I made is jumping out of a trade before it reaches its full
objective. I would have my full target objective and the trade would be progressing
nicely to the halfway mark. It may have even been to the 75% mark, but, for whatever
reason, I would decide to jump out! The problem is that you are not letting the trade
play out to its full potential. You are risking that full risk. That doesn't work in the
long run and it took me awhile to realize that. I should have let my method play out
the way it should and let it reach that full target objective.
One of the things we were taught early on as kids is that there is a need to be right. In
this case, you need to fight that need to be right until the trade progresses in your
favor.
My third mistake was revenge trades. That is where you have a loser and so on the
next trade you double up to win back what you lost on the previous trade. That is the
biggest mistake you can ever make. You are actually doubling the amount of risk in
that case and double up on that trade. So what happens if you lose 2 or 3 trades in a
row? You are going to lose your capital at a much faster pace and take yourself out
of the game.
My final mistake was to take trades out of my trading plan. They were discretionary
trades that had no rhyme or reason. I would jump on anything that moved in hopes that
the market was moving to that direction. I guarantee 90% of the time, the market
would take that big move up, I would jump on it behind that bar, and it would slam down
lower then it was initially. My point is not to jump on those moves without any kind of
a reason to do so. Stick to your method, your trading plan, and you will be successful.
Noonan: Those are all mistakes I have made and more, but to answer your question, I
think the biggest mistake for me was jumping on a trade system without really giving it

its due diligence. You can easily see the results that someone posts. Maybe it is
credible and logically, you think that you could trade this plan and get the same
results.
However, remember that your psychological makeup, as a human being, is not going to
operate on the same playing field as your intellect and thinking. While you are
rationalizing that you can trade this plan, and logically you can see that it is a
successful plan. The mistake you make is that internally, you have not taken control
of that plan without doing the homework and the due diligence. With that in mind, I
would say my biggest mistake was jumping on top of strategy and trying to trade it.
Later on, after getting kicked bloody in the markets, I realized that I didn't believe in
the system and I didn't do the homework that was necessary to build my belief
structure to where I could be psychologically convinced that the system was going to
work.
My next biggest mistake was trading with scared money. Because of my previous mistake,
I was then trading it in a way where I wasn't even thinking rationally. Trading with
scared money is that you are going to be taking probable losses and missing the
winners. That meant that I wasn't even trading the system by that point. Scared money
is lost money - guaranteed.
My final biggest mistake is trying to improve on a system that I haven't even done the
homework on! That led me to looking at other indicators and trying to find that magic
thing that is going to keep me out of the chop. Some magic thing that was going to tell
me when to take only winners that were coming and avoid the losses. None of that is
possible. You end up getting caught like a deer in the oncoming headlights of a car and
you are still trading scared. You end up suffering from analysis paralysis.
I had to overcome those mistakes in order to become a successful trader.
Soberman: I think if new traders could take down risk control, stick to their trading
plan, avoid unrealistic expectations, and accept loss - then they are probably better
off than 80% of the traders out there. It seems easy when you are a beginner, and you
might think that you would be able to stick to this. However, you would be amazed how
many people we have talked to are able to stay with their trading plan, and take proper

risk control. On the psychological side, they don't accept losses as they come and
move on to the next trade.
Logically, when we talk about it outside of the current market slides, it makes total
sense and we are all committed to it. When you actually start putting on those trades,
a whole other side happens. For example, people are sometimes great at this in Demo
Accounts. Then, the second real money is on the line, it is amazing how our self
control totally unravels. I promise you that every time you break those rules, you
probably also have a bank account that is nearing $0.
I use the same strategy whether I am trading the DAXs, day trading, or a whole other
market altogether. We may vary our time frames a little bit, but it doesn't matter what
we are looking at, we always use the exact same methodology that we know will put
the odds in our favor on every trade.
I believe that you need to have one strategy that you can master for a lifetime. You
must have the ability to change markets and time frames. I can easily bring up a Forex
day trading chart or a stock in Google.com on a daily chart. Even though they are
completely different, the exact same methodology applies.
The key to my success is to have simplicity over a strategy, one chart, and one time
frame to take signals. I learned this early on because I tried to synthesize multiple
charts at the same time. I found that in real time it was next to impossible to execute
the actual trades. In some strategies that looked good on paper did execute properly
in real time. They were virtually impossible. Some trades take these tiny little profits
and slip it into commission that you don't normally see when you back test start to eat
up the entire result. I don't think you need multiple strategies for each market that
you trade.
Question: Do you think that you need multiple strategies for each market that you
trade?
Short: As I reflect over the last year, I personally feel that it is key to have a single
strategy that you can use to move from one market to the next. I actually did that
over the past year when I traded in 3 different markets. The Russell was a favorite of
mine over the past 2 years, but, as many of you know, there was a changeover from the

CME to ICE. That particular instrument did not trade well when it switched in 2008. I
stopped trading for awhile and started to trade the DOW for a few months and did well
with it.
Then, I started to look at another market that is called T-Notes or Ten Year Notes.
That is the market I am currently trading and having some success with. The point I
want to make is that I could transition between each of those markets using the same
method. I didn't have to relearn anything. I simply put up my chart and the time frame I
was interested in looking at that I felt had the best trade profile for me. I was
executing trades very quickly once I decided to move between those markets.
As a mentor, I always tell my students that you don't want to be slow to make those
changes. You don't want to make these changes inter-day. You want to do that with
correct back testing and math analysis. The key is to be flexible. When markets
change, and they do change, have the ability to have a single method to move between
those markets.
Troy Noonan: I agree completely. I remember when the Russell switched over from the
CME's to the ICE and that was some of the most volatile market swings we have seen in
history since September and October. Having a market system that was able to self
adjust and re-calibrate itself on the fly in real time was amazing. We were actually
able to benefit from those wild swings. Even though it was hard to get away from the
Russell, which is a very addictive market, it was comforting to know I didn't need to
change anything because I had a system.
In all actuality, you are looking at a bar chart with price bars, buyers, and sellers.
We don't have to worry about a system where the indicators are constantly lagging and
only work on certain conditions in the market. We have a system that we can rely on
because it self-tunes itself to that immediate current market condition. It's based on
price movement. The indicators just support the signals that it's giving you.
To make the switch to T-Notes, that I took along with Brian Short, was a no-brainer
because it had the same bars on it, the same indicator set, the same signals to buy and
sell, and I can feel confident that the trade I am looking at right now has been self-
tuned by the system itself. This trade has just as much of a chance of succeeding as

any other trade I have used with my method.
Question: How do you know the right time to enter or exit a trade?
Soberman: We rely on our methodology to give us dynamic targets and stops that are
tuned to current market conditions. In early 2009, we are finding that the volatile
nature of late 2008 has kind of toned down. Again, if you are trying to trade a system
that has fixed targets and fixed risks, for example, the Russell - in the past I had a
philosophy to trade 2 points exactly and risk 1.8 or 1.6.
That was probably working at the time for the current market conditions most of the
time. However, in October - November of 2008, it would have not worked at all.
Ranges that were usually 10 points a day turned into 30 or 40. It wasn't unusual for
the DOW to have an 800 point range. If you have a strategy that is trying to take 20
points and risk 18, that is literally a hiccup. It could be 5 seconds when the DOW was
running 800 point ranges.
We are back, a few months later, to more normal ranges. They are probably a third of
what we saw in the fall of 2008. If your methodology is not dynamic and you cannot
adjust to volatility, unfortunately, it will break down on you. You will not have long
term success and you will land back in the position that you have probably been in many
times. That is probably why you are reading this.
For us, knowing the right time to enter or exit a trade is having a system or
methodology that you have total faith in. Also, knowing that whether the trade works
or not, I have a pre-defined point to stop risk, and a target. That way, I know I am going
to stay with that trade no matter what. I don't expect it to work every single time;
however, I know the odds are in my favor if I stick with my methods.
Question: How do you discipline yourself to get out of bad trades?
Short: First of all; what is the definition of a bad trade? How do you know, in advance,
that a trade is good or bad? The answer is that you don't know. What you can do is
rely on your method that you have learned and implement that. Along with that, you
should do some back testing of that method so that you have the edge that the
methodology is going to have in the market. That is the knowledge that you have at the
beginning of every trade - that your method gives you an edge. It doesn’t matter

whether that's a 65% edge or a 60% edge.
I have gone into many trades thinking that it has no chance of winning. I put my
thought process into that and think that I know better than the stock market does
which way it is going to go. Much to my chagrin, that trade usually winds up being the
winner. Likewise, when I think a trade has the best chance for success and that it’s an
easy slam dunk - that is the one that will end up losing!
In the end, none of us have any idea what that next trade result is going to be. The key
is to stick to your method.
Noonan: To me, the trade you shouldn't be taking is the trade that doesn't fit into your
trade plan. It's that discretionary trade that we discussed. In my opinion, an ounce of
prevention is worth a pound of cure. In other words, you need to be disciplined not the
take these discretionary trades and not get involved in the first place.
Soberman: I think all of us have beaten ourselves up over a bad trade. I blame the
market, the trading gods, and I take it personally. I never think of it as being a bad
trade as long as I took the entry when I was supposed to, I took my stop when I was
supposed to, I didn't over-ride the strategy, over think it, or think I was too smart for
the market. I find that it's almost good news if the trade is bad because I am that much
closer to the set of winning trades.
The only time I get upset with myself as a trader is when I am responsible for the trade
losing. The only thing you can control when you have a trade is risk. I don't care how
much you yell and pray, you are not going to make a difference in where the trade
winds up. The only control you have is to have targets and records that are
achievable.
Question: Do you stick to your trade plan no matter what?
Short: Yes, no matter what. We have something called the power of quitting and our
idea is to get in the markets, get out, and get done. We don't take every possible trade
that you can take during the day. We don't try to take Forex 24 hours a day. I don't
have my system beating me or my pager going off at 2am when the pound/US dollar trade
is setting up. When we are done it doesn't matter what follows that. I think
everyone's trading plan should include what to do in certain news and market events

that are outside normal. Still, those are all up to a trading plan.
Soberman: I agree that you must stick to your trading plan. Also, be slow to change
that plan. I have talked to many traders that are switching markets intra-day. They
think they are sticking with the trade plan but they are not. That way, it can be slow.
I think I have personally made more changes to my trade plan over the last year and I
am always slow to do it. I never do intra-session. It's always over a week or two. That
is after doing some thorough back testing to make sure that what I think I am switching
over to be reinforced with that information.
Noonan: I think you should have faith in your trade plan. Otherwise, if you can't stick
to it, it's probably a message that you haven't done enough work creating it in the first
place. The whole trade plan is supposed to be in place after you have done your due
diligence and you are convinced that this is a winning trade plan. Only then will you be
successful. Every time I haven't stuck to my trade plan, I ultimately wished that I did.
The result has always been worse. The trade plan was there for a reason and would
have produced the better result.
Question: What is your money management strategy?
Soberman: When we know our risk on this trade is less than our target, it is critical
for us. I believe that you need to have a strategy that wins more than 50% of the time
- minimum. There are strategies out there that, in the performance reports, only win
35% - 40% of the time that turn out to be very profitable because they go for very
large targets. What I have found is that even if those systems are good, the traders
are not able to stick to them over time. The reason is that you will hit such a large
streak of losers that psychologically it becomes really challenging when that large
streak of losses hits.
In the end, I think you need to be at 60% to mentally hang with it and stick with the
plan. I think if you can accept 60% or more and stay with it, that you will be 50% of
the way there. I think the other part is knowing your target is larger than your risk. I
think it's important to be able to have four trades and lose on 2 and win on 2 and
actually have a positive outcome. That is also going to ensure that you stay with the
methodology and stay with your trading plan.

Question: What is percentage risk per trade?
Short: We recommend, in whatever method you are using, to only risk from 1-3% at the
most if you are a beginning trader. Why not have some success and get some confidence
with whatever methodology you are looking at? Then, later on, you can escalate it.
When we talked to traders, we found that traders with bigger sums of capital that
they are risking in the market actually risked less on a trade by trade basis than those
with smaller capital. These are seasoned traders risking only 1%. A new trader often
does just the opposite with a small account and risks 5-10%. It should all be the
other way around.
Personally, I will risk one contract per $10,000 trading T-notes. That keeps my risk in
the 2-3% range on each of the trades that I am looking at.
Noonan: If you are trying to stick to a 2-3% risk you have to be adequately capitalized.
It's hard to find a market where you can trade 1-3% when you have a small account.
You are going to end up trading a market that is possibly too noisy and has too fast of a
time frame. It may be hard to achieve that 60+% winning percentage. That is something
that is a little trickier for smaller sized accounts. You may have to take a risk with a
smaller account because you really don't have a choice. You have to be able to trade
a market that has a winning percentage. Perhaps the risk per trade is greater in order
to get that winning percentage.
I would say the solution to that is not to over-trade and to have a more patient
perspective. Maybe you are only taking one to three trades a day in the beginning. You
let that percentage work for you over time so that you can slowly build your account
up. I think you should pull in the reins and be less aggressive as far as the number of
trades that you take each day.
In summary, when all is said and done, you have to be comfortable with the risk that
you are taking in any given trade. Psychologically, if you are not comfortable, you are
going to have a hard time letting that system work for you and you are trading with
scared money.
Question: If you trade Forex, how do you handle or avoid the risk of fast markets?
Soberman: This is a big problem area that we identify when doing coaching and

mentoring work. Revenge trading is a trap we fall into because we want to make up
our previous loss by doubling up with the current trade. Sometimes, the bad trade was
your fault. Then, you feel the need to redeem yourself and your risk control goes out
the window.
If you haven't already made that mistake, you probably will. You will save yourself
thousands of dollars if you take this to heart and don't let this happen to you. They
will probably only work out about 1 out of 5 times.
Question: Concerning the Forex market, if you trade them, how do you avoid or handle
the risks of fast markets?
Soberman: I think this applies to futures markets and stock markets as well. If you
are swing trading off of daily charts, slower charts, and four hour charts, you
probably don't want to think about news.
Short: I work in my training sessions everyday the news events that we need to work
around for that session. We highly recommend that you step aside 5 minutes ahead of
time if you are not in a trade and pull any open orders that weren't filled and watch
the price reaction after the release of that information. What we found by
implementing that is that it improves our odds. By trying to trade through that kind of
chop, it reduces your potential for success.
When the news comes out, there's an initial reaction in one direction, and, most of the
time you get 2 big bars up and then the market snaps right back. You either get whipped
into or out of a trade. There's slippage and its way too choppy. It’s better to step aside
for that.
Re-engage 2 to 5 minutes after that report and the price will smooth out. You will get
less fills and slippage and the market becomes more manageable. It is critical, when
you are trading, the minute of that news release, to know how they might impact and
whether you should step aside for those.
ForexFactory.com is a very good resource to understand those reports that are for
the Forex and equity markets. You can use those reports to understand when you might
want to step aside.
Noonan: Trading is risky. If it were easy, probably everyone would be doing it and it

would be illegal. When we decide to trade, we have to assume some risk. Some things
are beyond the power of our control, but, insofar that we do have the power to
control our actions, we must do so. Being aware of news releases is part of acting on
that power of what we do have control over.
News can happen spontaneously as it does all over the world that can cause the
markets to react violently and quickly. Again, that's part of the risk of trading and
you can't avoid that 100%. You have to rely on your trade plan, your stops, and your
targets. You can avoid that wild action in the markets by standing aside. You have to
make that part of your trade plan. There are no silver bullets here, but you can
control risk. You must be aware to prevent that from hitting you more often than it
should.
Short: Trading the news and Forex used to be one of the strategies to follow because
the brokers used to guarantee you an entry price. If you placed a stock price in on a
buy just a little bit above the market and the news would hit, they would guarantee
you a fill at that price.
They quickly ended up losing a ton of money on that so all those rules got changed. In
the fast market conditions, you are no longer being offered those fills.
News clearly moves the market. We are not saying we avoid the news, we are just
saying that you need to understand how the market behaves heading into the news
which tends to be choppy and thin. Right after the news, especially if there is any
surprise to the announcement; it is sometimes it’s all over the map. Sometimes it is a
huge move, but it's completely non-executable. Then, your risk control will go out the
door and you will find that you risk considerably in those conditions.
Even if you have the same win-loss in that scenario, you may very well put yourself way
outside of what an acceptable risk is going to be. You may be a Forex trader that
usually risks 30 or 40 pips, and all of a sudden you have a risk of 150 pips - then you
have got a problem. Unless you can quickly, on the fly, adjust your positioning size,
which, you can't think that quickly and make that happen.
Question: In regards to Forex, how do I identify currency pairs to trade?
Soberman: Core currency pairs are, for example, the Euro/Dollar, Euro/Yen,

Pound/Yen, Aussie/US, etc. We never enter those markets unless we have a selection
of pairs to choose from. If I am a stock trader, I want to feel like there are dozens of
trades that I can trade successfully with. I don't want to feel like that my strategy
only works on research in motion. Or, it only works only on a 5 minute chart. That is
a terrible feeling because I can tell you that it is going to be a failure.
Typically, you can focus on Forex the biggest of the big and leave it at that. You might
have some correlation, so you decide the Euro/US moves pretty similar to the US/SSF -
it's almost an inverse. The Euro/US and the Pound/US are not really dead on but there
is some correlation. You might want to mix it up a little bit.
I think that another thing to realize with the Forex trading is to make sure you are
trading a market that has good movement up and down. I don't need it to be a big trend
up or big trends down. It can move up and down. It is common to hit some chop before
the market moves it way down. I am looking for those clear and definable swings. The
key is to have good overall movement.
Another key thing about Forex is that it moves over a period of 24 hours. Do we
attempt to trade this market 24 hours a day? Absolutely not!
For the Euro/US we will only consider 1am New York time to 5am New York time as
trading time frame. If I am trading a Yen cross, then I am going to be very interested in
the Asian markets and trading the Japanese session hours. Those hours are generally
6pm New York time to 11pm. I would not be interested after that.
We always stress to our classes to avoid the chop. That is when the markets really
aren't being affected by the news. They have their specific sets of hours and then are
just choppy the rest of the time. You will take loss during choppy trade. You will save
money just by being smart about the time frames you trade in.
The good news with that is that it cuts down your work and effort as well. If you
aren't so stressed out about the commissions and that sort of thing, it actually makes
you more money.
Short: More than like, with the Pound/Yen, most brokers are charging 7 to 10 pips. If
your target profit tends to be about 20-25 pips, then it is probably not going to work
for you because the spread is going to eat up 40% of your potential profit. Instead of

trading this time frame that is quicker, you can just have a slower time frame. It will
affect the risk of course, but you can control that risk based on your position sizes.
You are not risking anymore on a percentage basis but you are ensuring that spread
doesn't eat up too much of a profit potential on a spread.
Question: Once in a trade, when do you get out? Greed can take over.
Short: I agree. For instance, when I have a trade, I have a very specific target in mind.
If this target is 92 pips on the Euro/Yen, then I am going to be getting out at that
specific point. We have trailing mechanisms like the 3 bar stop and 3 bar sequence that
lowers as the trade progresses. You need to make a decision: Am I going to take a fixed
target on this trade no matter what? Or am I going to exit half that trade at the fixed
and use my trailing rules on the second half?
That is what you really have to do ahead of taking the trade you have to have the
exact outcome in mind. You don't want to be making that decision in real time.
Soberman: I agree with you. There's nothing prescribed that tells you when to get
out. It’s all emotionally based. Again, it goes back to having a method that tells you
the entry, stop, and target at the beginning of the trade. Also, knowing what the edge
is on that. That is going to help your whole mental process upon entering and exiting
that trade. Whether it’s a positive full target or the stop.
Noonan: Fear can take over. Greed and fear make the market. It's greed when the
buyers are kicking in and its fear that’s pushing down the market where the selling
happens. You don't want to get caught up in that. You have to trust your trade plan
and know where you are comfortable. That way, you take yourself out of that whole
problem to begin with. You want to be in the position to prevent having to worry about
greed and fear in the first place.
Question: Is it possible to learn a successful system to trade in a couple of weeks?
Soberman: The indicators are designed to a lot of the heavy lifting already. They
actually identify for you the potential trade set ups. You take every set up. Sometimes
the set ups don't trigger and that is a time we would not take a trade. There are things
you have to learn. The basic mechanics of the way we try to develop our systems are
one chart that is very visual, very clear so there's no guessing. I think most people

can learn that in a couple of weeks.
That is not going to where your learning curve comes in. The learning curve comes in
when you actually execute on the strategy without changing, over thinking, or bailing
out on it too soon - using proper risk management, handling the trade psychology,
dealing with losing trades, etc. Of course, the mechanics of placing trades with your
broker. If you are not used to doing that, you might not understand the time limit to
get something in on a market that’s moving. These are all things where your learning
curve will come in.
I think the system itself, in two weeks or less, no problem at all. I think, with this
methodology, it would be easy in fact.
Short: In our classes, we often talk about trading as being like a three legged stool.
One of the legs in a 3 legged stool is critical. Without one of those, the stool cannot
stand. The three legs of the stool in trading are: 1 - method, 2 - risk, and 3 - trade
psychology. So is it possible to learn a system to trade in a couple of weeks? Yes, I do.
You can learn the method in 2 weeks, but the method is only one part of 3 pieces
critical to trading. All of them play heavily into the trading plans that a good trader
makes.
Question: If you could use only one trade tactic, what would it be? What is the easiest
system to trade? Finally, what is the best system for trading minis?
Soberman: These questions all fall into the same basic category. People tend to move
quickly between systems and strategies trying to find the next big thing. We would
answer the same way. We all trade our methodology, The Universal Market Trader,
everyday. That is all that we focus on. If there was something incredible besides what
we are doing, I guarantee that we would trade it. However, we stick with our method
because we know it gives us realistic expectations. We know what to trade, and exact
targets and stops. Also, we know our targets and stops are dynamic. We can change
the timeframe on the chart and I don't have to run a whole new optimization to make
the methodology give me the exact same results in the different timeframe. That is why
I personally trade the same methodology day in and day out. At this point, it is the best
thing I have seen for those reasons. It fits our trading plan because I can control our

risks, and I understand what kind of win/loss I should have. I understand what to
expect after winning trades and losses. I have a very specific plan of quitting everyday
as soon as I can.
Short: I second that. One of the things that I think makes us different at NetPicks.com
is that we actually trade our method. It's a single method that, once learned, is so
powerful across markets and different time frames. It makes you very flexible in
adjusting your trade plan. The Universal Market Trader is an easy system to trade
once you learn the mechanics of it. I don't think it matters what market you are
looking at, you can use it and see if it performs and fits your market trading style.
Noonan: I am naturally a break out type of trader. I feel more comfortable with those
kinds of moves. The Universal Market Trader definitely has those kinds of moves and
that kind of trade in its arsenal. After living and trading with the system for so long,
I've grown comfortable with it. So it's my natural choice. I haven't seen a reason to
change or switch my trade plan. The Universal Market Trader adjusts itself and tunes
itself to market conditions and continues to offer up an edge in the market. To me,
that's enough.
Question: How can I control my emotions when I trade? Also, how do you maintain
patience?
Soberman: I think we have covered these to some degree, but I will tell you it's not
easy. We try to tell people that you have to remain as neutral as possible in your
trading. It's important, when things are going well, that you are not getting too
excited. That you control your base emotions on those trades. It is something critical
to succeeding. You need to have that balance. You are going to fight some real demons
when that trade gets put on and immediately goes underwater.
By understanding that losses are part of the master design, then you will control your
emotions. You cannot go into panic mode over one trade. That tells you right away
that this person is way over-leveraged and trading with money that he should not be
risking in the markets. AKA scared money.
Short: One of the things we need to realize as a society is that we have become an
instant gratification society. Everything is fast and that translates over into trading

in some cases. We want it to go immediately to that target objective. It's hard to have
the patience to let the trade play out and I think the patience can only come with
practice.
In our training we talk about how each trade typically has 10 bars that it needs to
form before a conclusion is reached. Sometimes it takes more, and sometimes it takes
less than 10 bars to hit that stop. There is a whole range of emotions that comes in
during that process. Just like any skill set, you are going to have to learn patience.
I would also recommend that you keep a trade journal and write down your emotions
on each trade. Try to remind yourself to stay neutral in that process. Don't get
overly excited or overly depressed.
Noonan: I would say that this is the most important issue of all. Of the three legged
stool, this is the one that bears your entire weight. I've reflected on this from my
conversation with other traders, and one of the things that helps me, is to remind
myself why I am trading in the first place. Most people haven't even examined that
question.
You would be surprised some of the answers I've heard. I am always looking for a very
simple three word answer, but I very rarely get it. I think that answer should be "to
make money". So what does that mean? Making money on trading is not going to depend
upon the trade that you are in. We never know the outcome of any given trade. To
make money trading is to make money over time. The only way to make money over time is
to keep trading and trading the edge that your system gives you.
When you reflect over that, you realize that you can't get emotional over the trade
that you are in. If you are, you will have the problem of taking another trade. So then
where does this rollercoaster of emotions end? You are just doing one trade that
gets you cycling after another. Your emotions will get in the way of your trade plan,
your trade strategy, and the edge that it gives you over time.
If you realize that you are in the markets to make money, it allows you to take a higher
viewpoint and look at all your trades from a birds-eye view.
Soberman: This is why we like to do a lot of our trades live when we are doing the
trainings. It's one thing to see them as imaginary things on paper. When you have to

take those trades live, it really becomes a major challenge to stay with it. Now you
are having to absorb every tick up and down can be a lot against you.
Question: I would really like to trade full-time but I've never been able to trade
consistently to be profitable. I would like to live off of the profits of at least
$5000? What is the minimum amount to use to trade for a living? Is it true that only
your ability to dream limits your income potential? How can I build up a smaller
account into a bigger account for more leverage safely in a moderate amount of time?
Soberman: Trying to make a full-time living on a $5000 account is an extremely deep
challenge. This surprises us in a lot of the surveys that we do. We will ask people
who come to our webinars how many are full-time. We will typically get 40-45% of our
people who are active. The rest are newcomers or beginners. Then I ask how many of
them are consistently profitable. The only reason that you want to be full-time is
because you are consistently profitable.
The number without fail is 8% of the students who are consistently profitable before
they have anything to do with the Universal Market Trader. That tells you that you
should not go full time until you have traded consistently and successfully. Don't go
full time until your account is creating the income that you need. You will add so
much more pressure to the situation that you don't need. I would first grow my
account to the point where I could take out my original capital that I put at risk. I
would also want to be at a point that I know I can cover my bills from my account.
We can always change our position size when we have grown our accounts in the
future once we are consistently profitable. In the beginning, you trade with the
smallest possible position size.
Also, of the people we talked to, the ones with the larger accounts, the smaller the
leverage that they are using. There is a reason that one guy has that account. They
understand risk. They take risk, but they control the risk. You should be looking to
build your account up so you can reduce that risk in your trade and not the other way
around.
Short: I think as a new trader, in the beginning, I think the expectation of $5000 is
unrealistic. As far as the minimum account size, I think it's unique to each person. I,

however, would try to err on the side of having more capital than you have at risk.
Keep that risk low as new trader at 1%. As you become more experienced and
consistent, then ramp it up. Also, set up some levels that you ramp it up. Make goals
of ramping up the account 50% before you take any action at all in increasing your risk
for trade.
Most traders, the bigger they get, the less they risk for trade. For them, consistent
results come out of not risking so much.
Noonan: It’s going to be different for every trader in terms of what they need to earn
a living. Also, a different skill set comes into place. An analogy is that you trading
account is the biggest jumbo jet in the world. In order for it to get off the ground, it
needs a huge runway. You have to get a lot of momentum under the wings to get the big
jumbo jet off the ground. It could take 8 months to a year before you are able to
achieve a profit level where you are able to add a second contract.
Once you are at that level, maybe you are going to get a little more altitude under
your wings and you are going to see that separate curve and the incline of that curve
increase a little. Then, by the time you get to that 3rd contract, you are really
starting to see the nose of that big jumbo jet rise a little higher. Your accounts start
trading faster and faster and some point you are going to hit a steeper curve.
That is because you are hitting your contract quicker because you are trading such a
large position size. When you are at the point that you are trading 10 contracts per
trade, you will achieve that critical mass where your jumbo jet has turned into a
rocket.
Keep that in mind that it takes more time up front to get to the point of trading for a
living. Like any other business, it takes time to make that business profitable. You
have to learn money to make money. Preserving your capital has to be at the
centerpiece of all the decisions that you make. Don’t be so cavalier when you are
going through your learning curve. That is your life-line to be a trader. Do what it
takes to not lose money before you start to make money.
Soberman: In conclusion, I hope that there is one takeaway that you can garner from
this. Whether it’s saving you money, loss prevention, or something that will make you

more profitable over time. I think you definitely have heard quite a few things here.
Each of us has probably traded thousands of times and have probably experienced
things personally as well as relayed them talking with newcomers. Thank you for
reading along and we look forward to working with any of you who are interested in
NetPicks.com and the Universal Market Trader. You can visit our site at
www.UniversalMarketTrader.com. Our blog is www.UMT.com.
The blog includes charts, results, and things that will add to your education. If you
ever want to join us for one of our weekly webinars, you can do that at
www.NetPicks.com/weeklywebinar.html. We do a weekly showcase of the Universal
Market Trader and show the strategy and methodology that was done that week.
We hope to talk to you all soon!