There’s a lot of stock ideas to be learned from other investors and traders. So in the spirit of sharing the wealth, I want to point your attention to one, ForexKong.
But maybe you’re wondering…
Who Is ForexKong?
And that’s a good question. Kong (as his friends call him) is a Canadian expat living somewhere on the Yucatan peninsula. He has been making his living for the last 5 years aggressively trading ForEx full time…
I think that qualifies as living the dream, right?
Enviable trading lifestyles aside: ForexKong totes an astounding record. He’s up something like 200% in the last 18 months. And a trading record like that isn’t anything to sneeze at. When you see someone knocking it out of the park so consistently, you should know it’s worth listening.
And even though you might not trade ForEx (I don’t), you can still learn a lot about markets and trading psychology from ForexKong. Here are a few of my favorite lessons…
What ForexKong Taught Me About Stock Trading:
Stock Trading Doesn’t Exist in a Vacuum: It’s cute to think that technical analysis and forward P/E ratios are the only thing dictating the price of your favorite stock. But Kong has opened my eyes to the idea that stock markets are predicated on other markets – notably, currencies. And if you don’t consider these implications in your equity (or debt) investments, you are missing an entire dimension to trading. One that might end up costing you.
MacroEconomics Don’t Matter (Until They Do): ForexKong has an unparalleled grip on the macro view. And unlike a lot of the big picture analysts banging blindly on their jungle drums, Kong is quick to explain how the macro view can take a very long time to materialize (and then matter more than you imagined, all at once). But that doesn’t mean you should shed your conviction when things don’t go your way. I seriously advise you to check out Kong’s posts about Macro-economics and trading to zoom out your perspective a little.
Your Trading Perspective is Biased: This lesson from Kong is particularly useful for those of us enjoying the North American way of life. We are quick to think that we have a completely unfiltered view of the way things are. When in reality, the media-industrial complex of the Western World is framing the discussion and shaping our perceptions without us even noticing it! Kong regularly searches out the opposing view and is quick to question ingrained assumptions and lurking variables that skew our perspective (even if you don’t think they are).
One Timeframe is Never Enough: Here’s another thing I admire. Kong is very good at reconciling indicators and market signals across multiple time frames. He seems incredibly capable of waiting patiently in the trees for the proper entry, even when the short term trend is decidedly (and often vigorously) against his thesis. The other corollary here is that Kong is great at distinguishing between an investment and a trade. This is an important skill a lot of traders would be wise to absorb.
So those are a few lessons I learned from ForexKong. It’s pretty convincing stuff, right? And that’s just the tip of the iceberg…
ForexKong is incredibly patient with readers and very helpful clarifying his musings for commenters on his site. This kind of dedication to education isn’t something you see from most traders these days, so it’s really a breath of fresh air. I’ve personally come to appreciate his understanding and expertise in helping clarify follow-up questions for readers.
Kong is also good about updating his blog/twitter stream intra-day. He is especially active when there s a possible risk event. I always appreciate his perspective ahead of the next FOMC announcement. So what more could you ask for?
Well, there’s just one more thing…
Follow ForexKong on Twitter to keep up with his great trading ideas!
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