Trading For A Bright Future

Trading beliefs for trading profits

By Martin Cole, Home Gate Publications, £65

Mr Martin Cole is living the dream. He has a comfortable lifestyle in the south of Spain and earns his money trading full-time. He arrived at this position via a circuitous route involving going bankrupt in the British recession of the early 1990s, moving into a mobile home on his parents' farm and working two jobs to make ends meet.

Fed up with running to stand still, he embarked on a series of trading courses and ended up in the comfortable position he now holds. The book aims to share the secrets of his success.

He starts off with some basic advice. Step one is to buy the right tools and he recommends some software packages that are generally available. He also recommends using a reputable broking firm. He also endorses such basic practices as having two internet service providers and ensuring that the broker you deal with acts in a purely professional and impartial manner.

Cole provides thumbnail accounts of the various markets, and describes what is bought and sold, such as bonds, securities and shares.

Cole stresses that you have to be in the right frame of mind to trade, especially if you are going to rely on trading as your sole source of income. He advises that you should have a long, hard look at yourself and identify your strengths and weaknesses before embarking on trading.

Planning is of paramount importance also and he advises that you have at least a year's living expenses banked before becoming a full-time trader. He says "lack of sufficient funds can cause traders to hold positions longer than they should, resulting in an untenable situation".

The core of Cole's book is his bright futures strategy (BFS), which is based on a clear understanding of the market, and the direction in which it is going. His thesis is that belief is the driving force of the market and once a trader believes that the market is moving in a certain way then it becomes almost a self-fulfilling prophecy.

The trick is to know when that movement is changing direction and adopt another belief. Cole goes to great lengths to show how the BFS works and when it should be applied. He also reminds the prospective trader that there are days when it cannot be applied and that this should be accepted. Cole believes the market is organic rather than mathematical and that a close identification with its rhythms is vital.

Cole finishes with a couple of dos and don'ts. He reiterates his advice about planning and funding: never become obsessed with doubling your money and withdraw money from the markets regularly. Losses, he points out, are inevitable and should not be bound up with self-esteem issues.

Cole has produced an easily digestible work but the £65 price tag seems a little hefty. His website, www.learningto trade.com, is pretty nifty and is full of ringing endorsements from satisfied students.

comidheach@irish-times.ie