Become A Market Maven Be Picky When Day Trading Dan Zanger Offers Advice

Learn to Trade in Other Ponds Trading Setups for Success Pick Your Patterns Wisely
Become a market maven Be picky when day trading Dan Zanger offers advice
VOLUME 9, NO. 10 | OCTOBER 2010
Heading into the fourth quarter, the 2010 World Cup Championship of Futures
and Forex Trading®, is in full swing. More than 80 traders are competing in this
year’s event, which is open to both retail and professional traders.
Earl Erenler is one of the participants and shares his background, trading
methodology and general thoughts on trading with SFO readers.
By Kira McCaffrey Brecht
The Official Advocate for Personal Investing 83

GETTING STARTED for AT&T as a planning consistently and across a
After earning his MBA manager and making a broad range of markets.”
in 1991, Erenler dabbled good income. However, I Although his relation-
in trading mutual funds. was not making enough ship did not work out
“Like everyone else, I to support the life she for a variety of reasons,
naively thought with my was accustomed to,” he Erenler was hooked
intelligence, research and explains. on trading. He quickly
analysis skills, I could With this motivation, learned and saw that the
easily be a profitable Erenler began to study get-rich-quick idea was
trader. Little did I know and pursue trading more not a reality. Nonetheless,
what I was getting myself seriously. he continued focusing on
into,” Erenler says of his “I looked into trading the markets with an al-
early trading experiences. as a means to get rich most academic approach.
In the late 1990s, a new quick. I read many books
woman in his life sparked on trading and bought ENGINEER BY TRAINING
a renewed and more seri- Window on Wall Street, Armed with a back-
ous interest in trading. a charting software pro- ground and degree in
“From 1996 to 1997, I gram,” he says. “In Win- mechanical engineering,
was dating the daughter dow on Wall Street, I Erenler was able to draw
of a former Russian dip- programmed and tested upon his skills and train-
lomat to the U.N. She was a lot of mechanical trading in that field to help
separated/divorced from ing systems. However, I him develop his current
a European billionaire. At could not find one trading trading approach.
the time, I was working methodology that worked “Before opening any
trades, I use my research
and analysis skills to as-
sess 30 commodities on an
end-of-day basis. I write
The current World Cup Trading Championships con- down my findings into a
test runs through Dec. 31 and offers two divisions: trade journal. Any com-
futures and forex trading and stock trading. The top modity [in which] I see a
five winners of the futures and forex division will each trading opportunity, I then
earn the authority to trade a $50,000 awards ac- do a more detailed analy-
count. Check out the current standings for futures sis on, and likewise write
and forex and stocks divisions and learn more about down my findings,” Erenler
the prizes for futures and forex and stock divisions.
says of his current strategy.
84 OCTOBER 2010 Learn more about Wyckoff theory from expert Hank Pruden.
WYCKOFF
In his studies of the mar- “I am willing to trade
kets, Erenler came upon
the book Master the Mar-
any market when I see
kets by Tom Williams. He a trading opportunity
began using the methods
from this book in June
present itself.”
2007, and he credits his Earl Erenler, 2010 Word Cup Championship of Futures and Forex Trading® contestant
reliance on this approach,
which includes Wyck-
off theory, as one of the year in the World Cup methodology involves
reasons he began to see Championship of Futures analyzing the interaction
consistent profitability in and Forex Trading. not only of volume, clos-
his trading. es and ranges of individ-
Since the end of 2008, THE METHOD ual price bars, but also of
Erenler has been trading Erenler talks about the rallies and pullbacks. As
full time. This is his first Wyckoff approach: “The filtering mechanisms, I
Woodie’s CCI DVD

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The Official Advocate for Personal Investing 85

also use seasonality, grains, metals, financials, “I try to identify trades
economic and business meats and the softs. He and take profits between
cycle considerations, is a position trader, with support and resistance
and intermarket analy- an average hold time of levels. However, for a
sis. I am willing to trade about eight days. trade that turns signifi-
any market when I see cantly profitable, I will
a trading opportunity GETTING OUT then use a trailing stop
present itself.” How does Erenler handle order to keep me in the
Erenler trades a wide his exits, which some trade, in case it turns out
variety of markets, includ- traders say are the key to to be a home run hit,”
ing energies, currencies, successful trading? he says.
Erenler’s advice for Novices

Erenler says that learning to trade is a long process, “but consider it an apprenticeship.”
He offers these tips for traders just starting out.
1. TRADING IS A BUSINESS 2. FOLLOW A PLAN 3. PAPER TRADE FIRST

“As in business, you will “Write a trading plan based “In your paper trading,
have your good times, on what you have learned. are you able to see why
such as many winning The trading plan must in- certain trades were win-
and ‘home run’ trades, clude a money- and risk- ners and others were
and your bad times, such management section. losers? Review your perfor-
as drawdowns. So treat it “In addition, keep a trade mance. I would not start
like a business. journal or diary. Write as trading for real unless
“When you are experi- much detail as you can for your performance is bet-
encing good times, put each trade you take. Re- ter than a 50 percent win-
some money away for a view each of these trades. ning ratio and your profit
rainy day. When you are Try to decipher why losing factor is above 1.2.
experiencing bad times, trades were losers, and “When it is, trade with a
review and evaluate your hopefully, you will not make small amount of money,
trades. Are you adhering the same mistake again. and make sure your per-
to your risk-management Also, for the winners, de- formance is better than
plan (placements of stop cipher what made them 50 percent winning and
losses)? Are you monitor- winners, and look for similar 1.2 profit factor.”
ing your open positions?” setups in the future.”
86 OCTOBER 2010 Share your thoughts now!

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Learn to Trade in Other Ponds Trading Setups for Success Pick Your Patterns Wisely

By Kira McCaffrey Brecht

The Official Advocate for Personal Investing 83

Woodie’s CCI DVD

Visit www.sfomag.com/ads to get yours!

The Official Advocate for Personal Investing 85

Erenler’s advice for Novices

1. TRADING IS A BUSINESS 2. FOLLOW A PLAN 3. PAPER TRADE FIRST

86 OCTOBER 2010 Share your thoughts now!

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