Best Startup Business Advice I have Heard in a While

I always read a few positive articles in the morning, regardless of what my day holds.  It reminds me that there are other successful people out there that started where I did.  I refuse to read any “regular” news anymore, talk about depressing.  This quote is from Forbes’s Christopher Steiner.  He is talking with Hamdi Ulukaya from Chobani Greek Yogurt about his rise from $0 to $700 million in four years. The full article is here.

CS: There are parallels and advice that’s valid to anybody growing a business, yogurt, tech or otherwise.  What are your main tenets to starting and growing something successfully?

Ulukaya: There are five main things I focus on:

No. 1:  Keep your product simple.  Know what you do and do it better than anybody.

No. 2:  Invest in your core.  For us, that’s our yogurt plant.  We have the biggest best plant in the U.S., maybe in the world.  We’ve invested $220 million in taking that plant from a capacity of 50,000 cases to 1.4 million.  It’s the backbone of what we do and we treat it that way.

No. 3:  When you market your business, know that can fool almost nobody anymore.  There is too much information available to anybody who wants it.  Be real.  People can tell—or easily find out—when you’re not.

No. 4:  Focus on profit.  I run my business like a mom and pop store.  Cash is everything.  Without it you can’t increase production and it’s hard to be innovative.

No. 5:  Lead as an example.  If you make yogurt, go to the plant.  Work with your people; if you want people to work on Sunday, be there next to them.

And don’t forget to follow me on Twitter @bgin2end

Thank You for the Unsolicited Advice OANDA.

This made me laugh.

I download the reports from OANDA for every month and quarter of my trading.  It is a really nice feature and details all of the $$’s and %’s in one easy to read format.  At the end of the PDF, I noticed something new.  A “Personalized Trading Feedback” letter.  I thought, “Great! Maybe they have something insightful to say!”  I was wrong.  Read the letter below…

Trading without Stop Loss/Trailing Stop

Your open positions do not have associated stop-loss limits. Failing to include stop-loss limits leaves unattended positions vulnerable to exchange rate fluctuations. For example, your trade #xxxxxxx58 (long xxxxxxx units of EUR/JPY) was open for over 4 days without stop-loss or trailing-stop limits and was eventually closed at a loss of 268 pips.

Using stop-loss limits enables you to limit losses to a tolerable amount by setting the maximum you are prepared to lose on a given trade. Trailing-stop orders allow trades to continue to gain in value when the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a specified distance.

When setting a stop level keep in mind that you should consider the volatility of the market otherwise your stop-loss order may trigger too early on short-term market swings. You can read more about trailing-stop orders at (link)

Adding to a Losing Position

In several instances you opened new trades in a pair in which you already had a losing open position. For example, on Apr 5, 2011 22:16 EDT you executed trade #xxxxxxx63 (short xxxxxxx units of EUR/USD) at 1.425910 while you already had an open EUR/USD short position of xxxxxxx units with an average unrealized loss of 191 pips per unit. The new trade you opened was later closed with a loss of 210 pips.

The practice of adding to a losing position (also known as averaging down) is controversial as this risks available margin. Even though the market may eventually turn around and the open position becomes profitable, this ties up capital and could lead to a margin call.

On the other hand, adding to a winning position (also known as averaging up) is a popular strategy because it ensures net worth of the position is rising as new trades are opened and market continues the momentum to move in trader’s favor. Of course traders must monitor the market continuously and close open positions before a trend reversal leads to an unacceptable loss.

Please do not hesitate to contact us if you have any questions or concerns. Thank you for trading with OANDA.

Kind Regards, fxTrade Team

Don’t get me wrong; I love OANDA, however recently they have been difficult to work with via their customer service.   I didn’t know they were in the business of teaching traders or recommending strategies.

This year alone I have already put my account up 20% (click for verification) in the EUR/USD using the strategies they are telling me not to use.  I am not a conspiracy theorist but I do find it interesting that (in other reports) they advise the use of take profits and stop losses in your trading…hmmmm.  Makes you think.

Here is what I do that they don’t like.

  • I double my position if I am down over 100 pips (not arbitrarily, but at the next S or R area)
  • If my trade is in the negative, but not more than 100 pips down, I only add to my position what my last trade was.
  • If my trade is in the positive, @ +100 pips, I add half of my position.
  • I NEVER use defined stop losses or take profits. I use %’s and feeling to determine when to get out of a trade regardless of profit or loss.
  • I don’t let anyone tell me how to trade. I do it and I learn from it, good or bad.

Still here.

Still alive.  I moved (again.) Started a new job. Got a new puppy (almost a full-time job.) Remodeling our entire house. Way to close to launching a new business. Busy, just like the rest of you.

In case you are wondering, I am still VERY bearish on the Eur/Usd.  For many different reasons.  In fact, even more-so since my several posts in the recent past where I was selling.

FYI – The Philadelphia Union are in first place in the Eastern Conference…GO UUUUUNNIIIOOOOON… #doop

Keep it real. Keep it profitable. Keep it fun.

My take on a decent article…

http://blog.currensee.com/2010/08/five-observations-from-wealthy-traders/

Check this out…then read my commentary below.  I also left this for the author, but it hasn’t been approved yet to go in the comment section.  I want to elaborate on a few of these points so I think I’ll take #4 and #5 and break them down into 2 separate posts.  As for #’s 1, 2, and 3, see below.

Nice article, just some thoughts I’d like to share if you don’t mind. Points 1, 2 and 3 are contradicting. I agree with point 1, but subsequently don’t agree with 2 and 3. I have several ideas I would like to discuss – which I will do over at my blog for any of those interested in reading my ramblings.

#1 is important, don’t trade until you understand this. Otherwise, you might as well play Russian Roulette with 5 rounds instead of one, this is how bad you will get burned…

#2 frustrates me as a successful trader. The statement of “They stopped trying to pick tops and bottoms years ago” is a cop-out for not putting your reputation and money where your expertise as a trader is. Now, I may have stopped picking the exact bottom or top but I do pick an area where there is a better statistical chance it will either go up or down. When you stop picking areas where the market is going to turn or stall, you stop trading effectively. How do you make money in real estate? You buy at a discount and add value, wait for an opportunity and sell at a higher price than you paid (hopefully enough to cover the fees and taxes). You bought that real estate at a level that you thought was the lowest it was going to go, not on its way up (and if you did, you secretly picked a top, just one that wasn’t near your purchase price…). Trading is just like the real estate deal, if you don’t buy at a discount (or sell at inflation when shorting) then you are just waiting to go broke. If after the real estate deal the property values keep dropping do you sell it? Or, do you continue to add value waiting for the market to turn because something in your RESEARCH told you that this was a good investment. The trick here is do your homework, cut your teeth on some tough trades and make a trade…if you’re not sure, don’t take the trade. You have to pick up or down, I don’t pick either one until I see a discount (hint – discounts hang out near the areas of tops or bottoms).

#3 is much simpler, if a trader plans his trade as state in #1 then he has allowed for a certain amount of “Win” and a certain amount of “Loss” or drawdown so the statement of “They are patient with winners – and ridiculously impatient with losers” can not be true. They must be patient with their PLAN and let it work itself out in the event of a loss or gain.

Sorry if this got long, but I am going to elaborate more in a place where I don’t feel guilty for wasting space. Thanks!

Weekly Plan 6/28

On the EURJPY, we are in a range.  Since the beginning of last week we have gone from 111.00 to 109.50 consistently.  We are currently at the bottom of the range @ 109.50 and I am a buyer (again.) I know that I had said I would like to join the short party, but for some reason I just can’t find many opportunities (real great opportunities) to get in on the short side of things.

My current positions:

Current Positions –

Open Trades –
1/4 Lot (Long) @ 112.28, TP @ 115.37, No SL
1/2 Lot (Long) @ 11.10, TP @ 112.00, No SL
1 Lot (Long) @ 109.60, TP @ 110.25, No SL

Closed Trades –
1 Lot (Long) @ 110.70, TP @ 112.60 (Hit), No SL

No Open Orders

The Start of the Explanation…

Below is a post from the beginning of the year.  It is a brief explanation of my trading strategy and my method has changed since, but it is a good starting point.  Enjoy this regurgitation of information! I will right an updated version of this as time allows.

I developed my system out of losing trades.  Simple as that.  I want to caution you from moving any further and also throw up a disclaimer.  This post is just an explanation of my trading style, not a suggestion on how anyone reading this should trade.  It is very dangerous, very risky, and can blow up at anytime.

Moving on, if you have read my blog for any length of time, you can see my progression as a trader – barring some month-long hiatus’ – you can get a good idea of where I am going.  The Martingale <—- slightly more modified and adjusted to my strength’s  as a trader, but dress it up and put make up on it all you want, it’s still, at the heart, a Martingale.  If you don’t know what a Martingale is, click here, this will explain what it is and why it doesn’t work.

Into the Nitty Gritty;

What I do, is take a “Hedged” position, i.e. Long Eur/USD and Short AUD/USD.  For all intents and purposes, it is kinda a hedged position.  Then as one moves to the positive side and one to the negative – I watch.  What do I look for?  A correlated Support or Resistance Zone.  When it gets there, I close the profitable trade and double down on the losing one.  Then I move the double down trade’s Take Profit to the Break Even point for both trades.  One trip to the Break Even point and I have a position in that’s pretty much “free.”

The reason this works for me is because I am terrible at figuring out the direction of the markets.  What I am good at is identifying strong S&R lines and zones.  I have developed a very strict Money and Risk Management profile, even more strict than most, but I have turned almost all of my seemingly “unprofitable” trades into a very profitable trading style.

Please don’t get me wrong, I don’t just arbitrarily pick each side, I precisely analyse each market that I am trading in and very judiciously pick a direction that will most likely be favorable.  I have found that most of my trades stay open for about 1 to 2 weeks.

6/1 – June Already?

Wow, this year is flying by, I hope all are doing well (and if not, I hope you are learning well!)

Today, just like yesterday, I am taking some time off from the markets. I am working on my series of posts that describe my methods and strategy and need to abstain from looking at the charts so I can lay some fresh eyes on it next week.

I’ll keep you posted (no pun intended.)