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Mark
Cook on 'How to Lose Money Profitably'
By
Jim Wyckoff
The
title of Mark Cook's lecture at the recent TAG 21 conference in Las
Vegas may seem a little odd at first.
However,
successful traders know it's the amount of profit realized in
trading that's important--not just the percentage of winning trades.
Cook
was a featured speaker at the Technical Analysis Group (TAG) 21
conference, sponsored by INO.com
and held the weekend of Nov. 19-21 in Las Vegas. The annual
conference is put together by Tim Slater and consistently features
some of the world's best traders--be it in stocks, options or
futures.
Cook
is from East Sparta, Ohio, and operates M.D. Cook, Inc. from his
family farmhouse. He manages his own proprietary account and offers
a trading advisory service, "Mark D. Cook's Trader
Advisory," which focuses on S&P 500 futures, T-bonds and
OEX options. (Phone: 330-484-0331; email: cookfax2@aol.com)
This
professional trader's lively presentation focused on knowing your
own risk tolerance in trading and preserving capital.
"A
great trader who has made tens of millions of dollars from the stock
and commodities markets told me the one individual universal reason
for failure is the inability to take a loss. This has become my
motto, as the true path to riches lies not with the wins, but
managing the losses in a prudent, confrontational manner," says
Cook.
He
shared with the audience his first few years of unsuccessful
trading, including losing large sums of money.
Then,
he came back from the brink. Sheer determination and hard work are
factors Cook cites that turned him into a successful professional
trader.
He
developed the Cook Cumulative Tick indicator, and
overbought-oversold indicator, which draws on correlations between
the S&P 500, T-bonds and S&P 100 index (OEX) options.
Cook
won the 1992 U.S. Investment Championship with a 564% return.
The
trading veteran advises traders to keep a trading diary and have a
daily ritual when trading. Have a trading "battle plan"
before entering the trade. He said traders should have complete
faith in the indicators they use to trade.
Trading
losses will occur with every trader. The key is to manage those
losses and not let ego get in the way of sound decision-making.
"The
true path to success always must journey through failure. All--and I
mean all--the million dollar traders I know had severe losses. And
only when they coped with the losses did they achieve true
success," Cook said. "The road is long--perhaps five to 10
years. The emotions will sometimes be an obstacle that just plain
wins that battle.
"The
true winner is the one who perseveres. The race is a marathon and
not a sprint. Recognition that all humans fall short of perfect is
the first step to the trek to knowing yourself and knowing your
limitations.
"However,
you must also keep foremost in mind that our God-given talents are
very rarely realized to the true extent of the gift.
"Trade
and prosper--it is an attainable American dream," Cook said.
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