Ordinary People, Extraordinary Profits: How to Make a Living as an Independent Stock, Options, and Futures Trader

David Nassar delivers a complete and proven system for aggressively and successfully trading in today’s markets in Ordinary People, Extraordinary Profits. He explains the fundamentals of technical analysis and risk management, giving you a solid foundation to approach the market, and then describes a variety of trading strategies that will help you make consistently large profits without undue risk. Unlike other trading advisors who advocate a single approach to trading, Nassar provides a variety of strategies you can choose. In addition, he explains how to use new trading instruments such as E-Mini contracts, options, and exchange-traded funds. If you’re looking for a complete, proven system for aggressively trading the stock market, this book is an ideal guide.

Author’s Note:

You are about to embark on one of the most exciting journeys of your career….Ordinary People, Extraordinary Profits shows you the way to care for and nurture your investment capital. This book is an outgrowth of information that I have presented to many aspiring traders and investors to help them improve their trading and investment decisions. With study and application, you will find that it can help you, too.

No one cares more about your money than you do. Even qualified investment planners and stockbrokers seldom have the time to focus on your account as intently as you do. Taking complete responsibility for your financial future is one of the wisest decisions you can make. Your money provides you and your family with a certain lifestyle. Just as you paint your home and change the oil in your car, it is prudent to learn how to preserve your capital and work toward its growth.

In the bull market in stocks that soared to an apogee at the end of the past century, many people made huge profits. The year 2000, however, ushered in a bear market that, in just a few years, erased $7 trillion in investment gains. The tumbling market most heavily punished the investors who clung to the traditional buy-and-hold methodology. It is essential to have alternative ways for making—and securing—stock market profits against events like those that began March 2000. That disaster is a recent example, but history provides many others.

Herein lies the foundation of what you are about to learn: History repeats itself because human nature rarely changes. We can state it another way: Market psychology is the study of aggregated human nature as manifested on the charts and prices of securities. Astute traders have known this for many years. Investors have learned that techniques employed by traders can protect gains and minimize losses. If you are, or want to be, a short-term investor or trader in the stock market, I congratulate you for choosing this book. I have designed it to be the most comprehensive and state-of-the-art course in the industry.

By adopting the skills of professional traders, you will learn how to enter and stay on the right side of a trend—be it minutes or weeks in duration—and, most importantly, how to gauge when that trend may be flattening or about to end. (Those who held on to their Enron shares all the way up, and then all the way down, undoubtedly could have used that knowledge.)

Consistently profitable trading is related to the probability theory, which says the more possible outcomes there are, the greater the chance for success. This is also known as expectancy theory, and it works like this: There are no secrets, only statistical probabilities that markets will act and trend in a certain manner (bullish, bearish, market neutral, strong, or weak). The probabilities are quantifiable (based on market psychology) and use a model that statistically evaluates more winning trades than losing trades. When winners are found, profits are left to run using tools such as trailing stops; losers are quickly identified and covered (based on discipline). If this is a secret, then it is, by far, the most valuable one a trader can learn. After all, casinos have learned this lesson and build billion-dollar hotels in the desert with only an epsilon of an edge. The trader can gain better odds with this approach.

As the first step, you must see the market with an indifferent, instead of a positive (bullish) or negative (bearish) predisposition. With the proper techniques, you can make money in all market conditions, even directionless markets. You are best served by viewing the market for what it is, without a bias about direction. Said another way, “Trade what you observe, not what you believe.”

Mutual fund managers are often guilty of ignoring this rule. Most mutual funds only make money if the market goes up (the manager can enter only long positions), whereas hedge funds can make money in multiple directions, including sideways. It makes sense that increasing your strategies and opportunities to make money improves your odds of profiting. At MarketWise (www.marketwise.com), we attempt to take profits out of any market setting, no matter what direction that may be.

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