The Road to Success

By: Joseph Russo | Fri, Nov 4, 2011
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Proactive trading and investing is one of the very few endeavors in life where one must learn to expect regular and frequent failures as a routine matter of course toward achieving ongoing success.

As such, it stands to reason that prior to engaging, one must come to terms with, and embrace these expected failures as though they are an annoying but essential lifelong partner whom without one could not otherwise succeed.

Though winnings far outpace losses, riddled with failure is the Road to Success. It is a tough pill to swallow, but it is what it is, and there is simply no getting around it. More likely than not, this is precisely why 90% of all who try their hand at the business of trading abandon it at the first signs of challenge and adversity.

The Thrill of Victory

There is no greater thrill than successfully assuming the risks and responsibilities of directing your own trading and investment capital. Over the long haul however, climbing this particular ladder of success requires a great deal of planning and perseverance.

The Right Stuff

Apart from a huge burst of luck straight out of the gate, (which can frankly do more harm than good) what does it take to make it as a trader? The following is a list of essential prerequisites to consider prior to risking your discretionary speculative capital:

If you can answer yes to most of the above, you can then begin to give serious consideration in joining the elite-few who comprise the 10% of market participants that continually prevail while the majority fails.

Calculating One's Risk of Ruin

Calculating One's Risk of Ruin

The best risk of ruin calculator we have found thus far is located here. Since we have developed a proven trading edge with historical performance stats that go back a minimum of 3-years, it is possible for us to quantify the probability of ruin for an applied strategy within a given market and timeframe with a reliable degree of accuracy.

Nothing Risked, Nothing Gained

For example, after 719 trades (periods) over the last 5-years, including $9000 in slippage and $3400 in commissions, our short-term E-mini trading strategy produced an average monthly return of $400, which amounts to more than $30,000 in total net profits throughout the entire period.

What is the risk of ruin for this strategy? If one begins with trading capital of $20,000, within any given month there is a 24.31% chance of ruin associated with trading this particular strategy. In this case, risk of ruin is reached upon a 75% loss of initial capital or (-$15,000), which would render one's account dormant due to not having enough margin money remaining to put on another trade. Below is the equity curve associated with this particular short-term E-mini trading strategy.

The Magic of Success

Naturally, as one's stake would have grown from $20,000 to over $50,000 over the period, so long as one's trade size remained the same, one's risk of ruin drops to a paltry 0.08%. One can find more excellent money management and position sizing tips here.

Equity Curve Line

Shark Infested Waters

In order to survive amid the unknown waterways of trading and investing, it is essential that one plot and follow a proven strategic course to grant oneself the highest probabilities of long-term success. Acquiring reliable navigation tools to tilt the odds in one's favor is paramount.

The Thrill of Victory and the Agony of Defeat

We span the markets to bring you a constant variety of trades, the thrills of victory, (and yes) the agony of defeat. The ultimate human drama is assuming a calculated risk for unknown rewards. This is OUR Wide World of Strategic Trading and Investment Success!

Beneath the nostalgic Wide World of Sports introduction from which the previous paragraph was constructed, one may peruse our short-term trading performance for the month of October.

For October, the portfolio review of our short-term trading strategies unequivocally embodies the thrill of victory.

The monthly performance profile intends to exemplify a random statistical sample of profit opportunities that one might expect to gain through acquiring access to the NAVIGATOR within a given month of daily operations.

Trade Better/Invest Smarter


Elliott Wave Technology provides a suite of Winning Solutions designed to assist those who wish to trade better and invest smarter based upon the practice and deployment of proven trading strategies in concert with expert and unbiased chart analysis.



Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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