Trading life with Dale Gillham
Published in Your Trading Edge Magazine, 2011
Dale Gillham reflects on his trading journey and the trading strategies he uses today.
I was introduced to the share market when I began my career at the age of 19.
While I was excited at the prospect of the potential money I would make if I invested in managed funds, what I discovered was that after 5 years I had less than half of the funds I had initially invested.
While this distressed me, what I thought was even more ironic was the fact I had been paying so-called experts annual management fees to invest my money only to lose.
What a wake-up call.
At this point I realised I had two choices. I could continue down the same path and hope things changed or I could take a more disciplined approach to actively educating myself to achieve my financial goals.
Of course, I chose the latter—which in hindsight has paid off tenfold.
So two decades later when I reflect on my journey I can honestly say that while it has not always been easy, it has been interesting and, in most cases, exciting.
In reality, self-education requires both commitment and work; however, what I have discovered is that you don’t have to be a genius or a rocket scientist to achieve consistently profitable returns in the share market.
Throughout my career I have been fortunate enough to be involved in supporting thousands of people achieve their financial goals.
However, a common theme that became apparent in the early days is that most people don’t know where to begin their journey when trading the share market.
Interestingly, in my experience little has changed despite the enormity of information available on this subject.
The irony is that most people seek out quick fixes to achieving their financial goals with the mindset that short term gratification will fulfil their long term needs.
This is often spurred on by the proliferation of seminars and information available.
However, what I discovered in my journey and one of the best strategies I apply today is to keep things simple and to consistently revisit the basic foundations of trading.
Successful trading relies upon developing a simple plan and sticking to it.
All too often I have seen inexperienced traders develop a good trading plan only to change it because they have found a new indicator or tool that will make them potentially more successful.
However, what is important to remember is that if you change your trading plan you will change its effectiveness, which may not always be for the better.
Therefore, each time you change a trading plan, you need to back test it to ensure it works for you.
If you are not willing to back test the effectiveness of the changes you make, you are gambling with your money which means there is a much higher probability you will lose.
It surprises many traders to learn that I do not trade using common lagging indicators such as MACD’s or stochastics, in fact, I find that relying on the latest techniques or computer software is of limited value, and for many traders a complete waste of time and money.
Rather I prefer to use the techniques and strategies of masters such as Gann, Elliott and Dow to name a few.
These techniques are leading indicators and as such they provide the ability to enter or exit the market long before lagging indicators have given the trader a signal.
This means I am better placed to ‘time the market’, and get in and out of opportunities as they occur, which ultimately puts more profits in my back pocket.
Now I understand that it requires a little more work in learning how to apply and use some of these techniques, but I have found that when coupled with your trading plan and your money management rules the profits you can generate are well worth the effort.
So why all these years later do I still trade? Now I trade for the challenge, but years ago it was because I was sick of trusting so called experts and I wanted to control by own money.
People trade for a variety of reasons, some trade because they want to make money, some because of the challenge it presents, some for the adrenaline rush they get (these are the gamblers), others because like me years ago, they want to control their own money.
But no matter why you trade, I have found one thing to be true, learning to trade is the easy part, the hard part is understanding your psychology, because it’s true, the nine inches between your ears will determine your success as a trader.
I can honestly say that there is no substitute for hard work and that there are no short cuts to becoming a professional and competent trader; it is a 2 to 5 year experience.
My journey over the years has led me to where I am today, and also resulted in me writing, How To Beat The Managed Funds by 20%, so that others could learn from my experience and benefit from it.
I hope this article has given you insight into who I am and how I do what I do, but more than that give you something that you can take away and use for yourself.
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