December 2020
Hello and welcome to the final edition of the Safety in the Market Platinum Newsletter for 2020.
This time of year is traditionally a busy one as we look forward to Christmas and the New Year, plan holidays and recreation time, and also plan for the future. It is also a good time to take one last look at the year, celebrating our wins and learning from our losses, and then taking a short period of rest before moving on to bigger and better things in 2021.
With that in mind, I have some holiday homework for you to consider over the coming weeks. Don’t worry, you won’t need to submit anything, and it will not be marked! It is not written homework, it is merely ‘thinking’ homework. I’m going to ask you to spend some time thinking about two things.
Question 1: How could I make a billion dollars from trading?
Sometimes, it takes a big question to get a big result. This is a powerful question that cannot be answered in a single sitting. I encourage you to reflect on it many times over the next few weeks, as you go for a walk, or wait in a queue, or sit on a plane or a train. Just keep asking your mind that question. How could you make a billion dollars from trading? What standards would you need to lift in order to make that happen? Is it actually possible for YOU to make this amount of money from trading, at some point in the future?
Even if money is not important to you, I believe this question can help you to identify inefficiencies in your existing trading system and help you to improve the way you operate as a trader. It is relatively easy to make $100 or $1,000 or $10,000 from trading, and you can do so even with sloppy systems, poor risk management and lazy analysis. But to make a billion dollars, your trading system needs to be much, much better!
We will be discussing this ‘billion dollar question’ and building plans around it in January, 2021 within our coaching programs, but regardless of whether you will be joining us in coaching next year or not, I’d like you to consider the billion dollar question.
Question 2: How did David know that April 1997 would be a ‘strong quarter’ on the SPI200?
On page 29 of the Ultimate Gann Course, David reflects on the April 1997 low on the SPI200. At the time, he was predicting that the market would take off and have a strong run to the upside. In other words, he wasn’t just expecting a low and a move up, he was expecting a ‘strong move up’. Why?
Months before the 2 November 2020 low dropped in on the Australian Dollar, I was not only watching for a low, I was watching for a strong move to the upside to follow. A quick look at either the FXADUS or AD-Spotv charts in ProfitSource will show you that the run up out of the 2 November low was indeed strong. Again, I encourage you to ask the question – “why?” Why was I expecting it to be ‘a strong move’?
Although the answer to this question resides mainly in the Master Forecasting Course, there are several clues to it scattered throughout the Ultimate Gann Course. In fact, when David first wrote the Video Series Manual in 1997 (which later became the Ultimate Gann Course), he thought it would be the final course that he wrote, so he made an effort to hide all of his techniques in the course. For this reason alone, it is worth going back over your Ultimate Gann Course and paying attention to details! For students in Ultimate Gann Course Coaching, I will refer you to our November lecture for some clues.
If neither of these two questions appeals to you, you may like to come up with your own big question to reflect on, such as ‘what is the maximum Reward to Risk Ratio you could achieve on a single trade and how would you achieve it?’. I believe it was Henry Ford who said that ‘thinking is the hardest work there is, which is probably why so few people engage in it’. I have found over the last 15 years that periods of deep focus and concentration are ALWAYS rewarded, often in unexpected but very positive ways!
Now, on to our articles. This month, Aaron takes a look at BHP and gets you started on an outlook for the first quarter of 2021. Then, Rob takes a look at support and resistance levels on Gold, while Gus reflects on the similarities in thinking between trading and that other great frustrating pursuit, golf.
At the end of this week, the Safety in the Market office will be shutting down for three weeks and opening up again on Monday, 11 January, 2021. If I don’t see you before then, I’d like to wish you and your families a very Merry Christmas, a Happy New Year, and a prosperous, joyous and fulfilling 2021. Di will be taking a well-earned break over Christmas, so if you need to contact her regarding any of the recent offers or promotions, or to ask any questions at all, please do so before the end of the week!
Finally, I’d like to thank you all for being a part of the Safety in the Market family. It truly is an honour and a blessing to know you all, and it is a privilege to be able to walk this journey of trading (and life) with you. Thank you for being who you are, and I look forward to catching up with you and working with you in 2021 and beyond. Take care, and I’ll see you in the New Year.
All the best
