Trade What You SEE Not What You BELIEVE
This is part two of my January 18 interview with Roberto Hernandez, Dick Diamond's trading course assistant.
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Vadim Pokhlebkin: Roberto, have you continued to work with Dick Diamond since we last spoke? How has your professional relationship progressed?
Roberto Hernandez: I'm happy to say that it has progressed. Dick teaches his course only three times a year. But last year students kept calling me wanting to attend another seminar. So I asked Dick -- actually, I begged him -- to have a fourth seminar because the three regular ones were full; we even had waiting lists for the second and third classes. Dick agreed to have a special seminar in November and that turned out to be the best class we had all year. It was also full, and we made one important addition. Now, every student leaves not only with Dick's Market Mentor booklet with his market-timing indicators spelled out, but you also get a paper trading account. We had trading software representatives in class helping students to learn it. So if before we had some students who had no idea how to use software, now you have everything you need to apply Dick's principles. That's a big improvement, I think, and Dick is happy with it too, because now he can spend more time with each student on the actual trading material. We've not yet decided if we're going to have a fourth class this year.
VP: When I attended the course three years ago, Dick said something very striking to us on the first day. He said that most of us would not succeed as traders because we wouldn't have the discipline to follow his method. That honest warning hit me like a cold shower. In your estimate, how many students have been able to repeat Dick's success? Your success? Of the ones you stay in touch with, how many have added to Dick's trading methodology?
RH: Dick's statement remains true. In class, everything seems very clear: Just do what Dick says. But when students return home, most go back to their old habits. Their main mistake is that they trade what they believe, not what they see. In other words, they follow their emotions rather than Dick's method. Dick makes himself available to every student after the course, but personally I stay in touch with four-six students from each seminar. Most of those are doing well, although it is a low percentage of the overall class. Dick's right: Only a few students per class have the needed discipline. By the way, if you think the seminar's main goal is to teach you how to make money trading, it's not. The main goal is to teach you how not to lose money. Those who have the discipline to follow Dick's method typically succeed.
As for other trading methodologies . . . I compare the seminar to learning to read for the first time. When you come to Dick's course, he first teaches you "the alphabet," then you progress to "words," then "phrases." Then you go home and review. After some time, once you've learned this new "language," you can try and learn another one.
VP: By Bob Prechter's latest estimates, this bear market is far from over. What word of advice would you offer to traders who choose to speculate in it?
RH: I agree with Bob. My daily and weekly oscillators are pointing down, so we are at the very least looking at a substantial (and tradable) correction. But the volatility will definitely increase again. And as I said before, if you are not experienced with trading in volatile markets, this is not the time to cut your teeth. Most novices see the markets jump up and down and they want to catch every move, so they trade more often. That's a mistake; I've learned you have to scale back and trade with the larger trend. So, my advice for any would-be speculators would be:
First, way too many people jump into trading before they know up from down. Make sure you know what you're doing; I think Dick's course is good for that.
Second, trade with the trend. But you'd be surprised at how many people lose money even if they get the trend right. They have no game plan: no idea how to place stops, when to take a loss or a profit, nor the discipline to do any of that. Dick can give you the trading tools, but the discipline part is up to you. So be very careful out there. I wish all of your readers good luck.
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