What is your best trade?
When I started out I was a dumb like most new traders and I made huge bets on Intel Corporation, swinging out short and long every few days. After a number of months I racked up several thousand dollars profit.

What was your worst trade?
Intel Corporation. I did not follow a stop order or my intuition telling me to cut my losses (Clue: When your stop is hit and your intuition is telling you to get out, RUN!) and I lost several thousand dollars—about ¾ of my account, within a week. It took me a few more years to figure out what a stop loss was and the importance of following them.

What is a stop loss?
Your “I was wrong point”. In your “thesis of where the stock is going”, your stop loss is the point where you say, “Uh-oh! I screwed up. Guess it wasn't going that direction after all. Let me keep my losses at 1% of my trading capital so I have money to trade another day”. This mentality is the hallmark of a professional trader. (That last sentence is worth a thousand dollars.)

What else do you do for a living?
I teach at a community college and run a small private psychotherapy practice in Asheville, NC—Asheville Counseling.

Will your counseling sessions through Asheville Counseling help me trade?
Probably, but if I were you I wouldn't waste my money. Your hard-earned dollars and time would be better spent studying the markets and learning to trade. Counseling is good for some mental disorders and to some degree would help you get your head around some of the faulty beliefs you have regarding stop loss placement and trading expectations, but I would suggest my mentoring services instead or any mentoring services. Experience and making money in the markets is the best teacher.

At one time I had this fantasy that I would do intensive psychotherapy groups for traders and during sessions help them uncover their hidden beliefs that caused them to lose money. Then after I started making money I realized my logic was flawed: The greatest thing I learned about trading was not psychological, per se, but just learning how to trade. I went from a losing trader to a break even trader almost overnight when I started managing risk. Then over the next couple of years I developed the strategy that I teach others. It was not the psychological game that I thought it was. It was just pure misinformation on my part and my own over zealousness that caused me to over leverage myself.

That being said, I have considered offering workshops for participants interested in both services, something tells me there is a market for this service. The first would teach trading and the second would be an optional psychotherapy group. This would keep costs down and allow a certain camaraderie between members in the psychotherapy group; the identification with other traders that are struggling with the same psychological issues could be helpful.

On this note, I would be wary of any psychotherapist offering to "cure" your psychologically-related trading issues or charging some astronomical amount of money for this service. Therapy normally runs between $50 and $150 an hour depending on the therapist and where you live, and group psychotherapy is usually $25 to maybe $75 an hour per person. I charge $100 and $25 respectively.

How can mentoring help me?
It can cut down the time it takes to learn the ropes.

Why should I hire you to be my mentor?
Now that is like giving the wolf directions to the hen house...

First of all, I am doing this to make money. That is it. I do realize that for many people this is an expensive proposition and I will do my utmost to teach you the proper way to trade; it is up to you to do the rest.

I am a good teacher. This is what I do, and have been doing for many years, for a living. My movement into trading education is a recent endeavor, but my experience teaching people, both didactically and experientially, is extensive. I purposefully waited until I started making money consistently before starting this business. I think that you will find my techniques and clarity useful to help you start trading or to help you become more profitable.

I was once talking to another trader who had spent years, like me, learning this business. During our conversation I noted that the one thing I wished I had had was a mentor. He wholeheartedly agreed. If you haven't had a mentor, once you learn how to trade, you will wish you had. It makes the process so much easier.

How often should I work with you?
It is up to you. You can consult with me over the phone although I prefer face to face; in fact, I would rather take a weekend off and visit the city you live in, if it is relatively close, to meet with your for an hour or two in person rather than try to do this over the phone. At any rate, my prices are rather inexpensive since you pay by the hour. At the rates I charge you can consult with me, go out and trade and come back later for further clarification. For many people a few hours of face to face or some group guidance every few weeks or every couple of months will be all they need.

Why is mentoring so expensive?
I base my prices on the competition and the length of time it took me to learn the business. There is also the reality of profit potential for investors—this fuels the escalated prices which are all to common in this business. Additionally, you get what you pay for.

Why didn't you have a mentor?
When I started trading the only services I found were for thousands of dollars. Maybe I was looking in the wrong places or maybe there were just not that many people out there; I don't know. Additionally, I didn't have much money and I decided that I could do it all by myself—that probably narrowed my perception of what was available.

Do you work with people over the phone, email or through the internet?
I don't like to. None of these methods convey the subtleties of trading very well. I like to see people I work with. Direct questions and answers make the educational experience worthwhile. I like to have fun at this too and interacting directly with people is more fun for me than just talking on the phone.

Ahhhh!  Your just trying to upsell me with your in-person methods and lack of other options!
Believe what you want. The truth is, I really don't like phones—they are so disconnected. I feel the same way about email and talking through the internet. I'm the guy that walks across the building or drives across town just to solve a problem or talk face-to-face, even if it is only for five minutes.  I actually teach (counseling) through the web at my other job and, based on my own experience and the feedback I get from students, this is not such a great method. I would rather be associated with a good educational experience than a marginal one.

Why is there a minimum hour teaching requirement?
Driving cost.  If you live in or come to Sylva you get my base rate.  If I have to drive to see you it costs me more so I charge you more.

What about if you happen to be in the city where I live?
$150 per hour. Just get in touch with me and I will let you know when I will be in your area.  I am in Asheville about once every three weeks and Atlanta every month or two.  The other cities are more infrequent.

How can I get this same information for free?
Ha! Go to StockCharts.com and start reading their ChartSchool section. Next, read everything you can get your hands on. Usually you have to pay for books and videos unless you know someone who has them and there are always those few books you will want to keep forever. I have a list of books that I recommend people start out with. Investopedia is also a good place to learn and Amazon and Trader's Library are good places to buy books, videos, etc.

eSignal has some good free pre-conferences to go to. If you sign up for their newsletters every once in awhile a free 2-3 hour in-person presentation will come to your area. The speakers are real traders and their advice is good. Be aware that their goal is to get you to sign up for the all-day $1200 conference and to buy their software. I have been to two of their free presentations and both were worth the 3 hour drive from my home and the money I spent on food, a hotel, etc. I will be going to their additional free conferences in the future (I'm still cheap!).

I have also had good luck learning from in-person groups which I found online. Recently I found an Investors Business Daily and an options group in Atlanta—I wish I had thought to look for these years ago. Yahoo! Groups and Meetup are good places to go when looking for in-person trading groups. The cost at both of the groups I go to is nominal ($5 to help pay the room rent). Both are well worth the 3 hour drive to Atlanta, hotel, etc. Nice people these traders. Intelligent, good conversation.

How can I learn how to trade in less time than it took you?
Everyone learns in their own time. It takes as long as it takes. Besides mentoring, here is a key that is worth a million dollars: Don't risk your whole account on a trade! Risk only 1% no matter how small your trades have to be. I spent 6 years and lots of money to learn that lesson.

Realistically I would plan on at least a few years to fine tune your strategy and become consistently profitable although I have heard of people who did it in 6 months or less. It depends on how much help you have from other traders and how quick you learn. I was a slow learner.

How much do you make trading?
My account is still small, under three thousand dollars. I am still building it back up from the damage I did overtrading. From 1999 to 2006 I dropped $30,000 as a losing trader. "Tuition," they call it.

At this point I had an epiphany—actually I just realized the importance of not over-leveraging myself. I started out again three years ago with $30 (yes, thirty dollars) in a forex account with OANDA. I made some mistakes in 2006 and 2007 then essentially eliminated these two years losses with my gains in 2008 (up 50% for the year). In 2009 I finished with over 60% in gains and 2010 has yet to close.  Wish me luck!

So this service is actually to help you build your own account back up.
Exactly! I am selling out.

Until recently, I purposefully avoided committing significant capital to my trading account because I burned myself so many times. When I opened the OANDA account three years ago I made a commitment to myself that until I was consistently profitable I would risk very little cash until I learned to trade.

Now it is obvious to me, because of the returns I have had month after month, that it is time to start adding more funds. Currently I am committing about 1/4 of my paycheck each month to my trading accounts and offering this service to grow my nest egg faster.

In a few years (or sooner hopefully) I will have enough capital so that I don't have to work a full-time job. At this point my mentoring business will probably go by the wayside and I will offer all-day or weekend trading workshops instead.

What happens if you can't make money off this business venture?
I will have had fun trying. If nobody wants mentoring services I will start charging for some of the "advanced" lectures—the ones further down the list and focus more on trading workshops.

How much does it take to trade exclusively for a living?
Your average yearly earnings should at least equal the salary you are accustomed to living on, then I would sock away an additional two years of backup salary. For example, I normally make about $50,000 per year and conservatively I pull in about 20% per year from the markets. That would mean I need about $350,000 to do this full-time (see why I am selling out?!). ($250,000 * .20) + ($50,000 * 2 years) = $350,000.

How much do I need to start trading or investing?
I recommend at least $10,000 or more for a stock account and $25,000 or more for a futures or forex account, but initially you should probably be paper trading. Hear me out before you start your banter: Write down your entry and stop loss points on a piece of paper and figure in accurate commissions then as you build up money open a real account; this is actually not such a bad idea because in the time that it takes you to save a decent amount of money to trade with you can learn how to trade properly (I know you can open a stock account for $500 and a futures account for $2,000, but the additional $9,500/$23,000 keeps you from over-leveraging yourself and helps to stifle the sting of commissions). I lost the majority of my money by being underfunded and by trying to keep my stops too close because I was underfunded. Additionally, if commissions are too large in relation to your account size, they will destroy your small account's profits. Also, if you have less than $25,000 you are not allowed to day trade stocks in the United States because of the FINRA day trade rule. That means you will only be able to day trade futures, forex or stock markets in other countries.

Who are these FINRA guys? 
FINRA, the Financial Industry Regulatory Authority, is the "broker cops". FINRA is the new name for the agency which used to be called the National Association of Securities Dealers (NASD). Although usually associated with the government, FINRA is actually a private corporation that works for brokerage houses (Merrill Lynch, Goldman Sachs, etc.) with a wink and a nod from the government. They also contract with the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations (NASDAQ) and other organizations related to the markets.

I only have a few ____ (hundred, thousand, etc. dollars)! Where can I start trading!?!
Well, if you are going to trade small amounts you will probably want a "mini" forex account until you build up some real capital. Alternatively you could day trade futures, but I don't recommend that unless you have been consistently successful paper trading futures for awhile (like 2-3 months). You will need $5,000, at least, for a good futures day trading account (and that is pushing it).

On the other hand, you can get a good mini forex account with OANDA (no, I don't get any money or kickbacks from them) and fund the account with as little money as you wish. Every other forex/stock/futures broker I have looked at plays games with trade size requirements, that makes your risk too large. Trust me, I have checked everywhere. The say “mini-account”, but you are forced to place really, really tight stops because their minimum trade size is too large, almost always $1/pip or tick. Additionally, these brokers do not make it easy to figure out their contract parameters and you must ask very specific detailed questions to get this information, if they even answer.

OANDA is the only broker I have found which has a true fractional account. (I know about ShareBuilder, nadex.com (HedgeStreet) and some of the mini-lot brokers. Go examine your risk using a realistic 1% stop loss and the actual cost for end-of-day trading with them. You need a much larger account than their minimums to safely control risk.) At best ShareBuilder might be good for longer-term investing, but why don't you just go trade in a smaller priced stock?

Trading with a very small size will allow you to have proper stop loss placement and you will not get wiped out when you are wrong. If you want to trade forex with someone other than OANDA I would recommend $25,000 or more.

Be aware that it is best to start out trading daily or weekly charts and then move onto intraday charts as proficiency increases. Brokers talk of 95% failure rates for day traders. It is very, very difficult to start out with the Ferrari when you don't know how to drive. Don't worry, there is enough “action” in end-of-day (EOD) trading to satisfy your yearning for speed.

How often do you lose money?
I have never officially examined it, but I suspect about 50% of my trades don't work out. It may be 40% or 60%, but it is somewhere around there.

This is an aspect of the markets that it took me years to understand and that most people cannot fathom: You will lose money about half the time and you can still make millions. The way that you do it is by cutting your losers (keep your stops at 1%) and by letting your winners run (hold on to them as long as you can). Then your winnings make up for your losses.

This sounds like gambling.
That is why they call it “the game” in the financial industry. The entire world's economy is just a big game to a lot of greedy, rich players. I love it!

Do you use fundamental analysis or technical analysis?
Both, but I am primarily a technical trader. I use fundamental market analysis in a sense, as at times I pay rigorous attention to the news on Bloomberg, NPR and CNBC. I often trade off news events which I believe will shift stocks or currencies for nice moves. Other than this I do little fundamental analysis.

Do you have any recommendations for methods that utilize the news for trading?
Yes, but understand that I do not use a news trading method per se. My use of the news is to give me an overall feel for the direction of the market, then I simply trade in that direction. David S. Nassar's book, How to Get Started in Electronic Day Trading Home Study Course has a very good chapter on trading the news. This is a good place to start. Be sure and get the Home Study Course version, ISBN 007135266X, not the regular text with a similar title.

How much time do you spend trading?
Anywhere from 2-3 minutes to 45 minutes per day. No kidding. I do not do much technical analysis other than monitoring positions I am in and putting on new positions. Since I am often nearly fully invested I just take money off when a stop is hit or take profits when I feel like a trade has had a nice run. Honestly, most of the time I spend 10 minutes or less per day trading. No joke.

My girlfriend likes to watch me trade every now and then, at times she has said, “Oh, you're just buying it when it goes down a little. That's easy. Anyone can do that.” She does not realize how long it took me—8 years, to make it look so easy.

You will spend a tremendous amount of time learning about the markets to become successful at this business.

What is the difference between trading and investing?
This is funny. Before I understood what trading was I thought it was risky and bad, and now that I am making money I see it as the only way to approach the markets. Investing is usually thought of as something safe and long term, but as most investors, or wannabe investors, learn it is anything but safe. Investors usually get their proverbial "head handed to them" if they stay in the market to long. A long running joke amongst "traders" occurs when a trader holds a position too long: Others soon begin jokingly referring to him as an investor.

Do you have any recommendations for resources on taxes?
Yes, a good accountant and a copy of The Tax Guide for Traders by Robert Green. After I got this book I grilled my accountant, Mr. Harvey Jenkins, with questions to make sure he was taking advantage of all the tax benefits I was entitled to, he was. At the end of the session he commented that it had been a good test. Be aware that tax law is constantly changing and even though Green's book was published in 2004, my accountant pointed out a few areas of law that had recently changed. Fortunately, Robert Green keeps updates to trader and investor tax law on his web site.

Is there anyone else on your staff?
No. Currently, just me. Although the trading goddess will probably accompany me if I come to speak.

What time frame do you trade? Intraday? Daily? Weekly? Monthly?
I do not do much day trading although I have in the past. I find that end-of-day trading works better for my schedule and my lifestyle. I will put positions on for a swing trade (3-5 days) and may leave it on for weeks depending on how the market acts, so technically sometimes I am a position trader. I am usually in and out of the market within a few days to, rarely, a month or more. I like to get the money and run.

When do you trade?
Normally about 6-7pm each day. I usually trade the forex market and I wait until Reuters pumps out its data to Metastock before I trade. Before I bought Metastock I would put my trades on about 4:30pm or 5:00pm. When I trade the stock market I do so near the closing bell.

In a nutshell what is the method you use?
I use divergence and convergence in RSI along with trend lines to determine direction, paying particular attention to double bottoms/tops in RSI and price. Then I enter on pullbacks and on breakouts from chart patterns in the direction of the trend. When I day trade I don't pay as much attention to the overall trend and I primarily utilize chart patterns for short, quick moves in the market. For day trading I primarily use 8 hour and 4 hour charts, but if I am watching the computer like a hawk I will trade off 1 hour, 15 minute and 5 minute charts.

Aren't you worried that if you give away your method people won't want your service?
No. Some people will figure it out for free and if they can great! But for most people it helps to pay someone, even if only for occasional guidance because the learning curve is so steep. The truth is I can repeat my method over and over again to you and it will still probably take you a few months of doing it before you feel comfortable trading on your own. Then maybe a few more months of trading, if you are lucky and a quick learner, before you are profitable. In fact, the trading goddess (who has a high IQ) was with me recently and as I was explaining another chart pattern to her she finally got it, "Wow, this is hard! I've got a lot to learn." She has spent the last three weeks reading trading literature and watching me put on and take off trades at the end of the day.

Think about it, the fact that 95% of day traders wash out and the numerous horror stories I'm sure you have heard about traders wiping out their life savings tells me there is a very good market for my services.

Will your method work for me intraday since you aren't a day trader?
Oh yeah! There is no problem there. I don't like to day trade, that does not mean I cannot day trade. I actually have a medical condition—some intermittent neck pain, that crops up when I sit or focus for long periods of time. As a result I have developed trading techniques which allow me to work lightly if I need to.

If I could truly trade the way I wanted, I would spend many hours day trading, but as it turns out—and maybe for the better, the methods I have developed to accommodate my minor physical complaints is just what most end-of-day, working traders want. My methods also allow me a great deal of time to do things other than watch the markets like yoga, meditation, vacation, etc. I prefer teaching trading over trading to be quite honest. (The same thing happened with therapy: I prefer teaching therapy over doing therapy with clients.)

Will your method work for investors or longer-term traders?
Yes. Although you may have to "trade" more often than you have been taught is correct by the media or your own belief system. (Sure, I know about Warren Buffett—he holds companies forever and if you want to use his methodology, you need to go study his methods. A number of good books have been written about him, but be aware that Buffett does not just buy and hold various companies as most people think. Besides value investing, Buffett uses a variety of very advanced trading methods in many, many different markets. Here is a good article outlining some of his strategies.)

Why would I have to trade more often if I am an investor?
Because the average run of a stock is only six to eighteen months. Let me say that again, the average time that a stock moves up providing you profits on your money is usually only 6 to 18 months. Think about that for a moment. In other words, even if you have your money invested for a year, you are taking a chance since some stocks only move for half-a-year and if you leave your stocks invested indefinitely you are taking a huge chance because on average, the maximum run you will achieve is only 18 months. That is unless you are willing to wait for another economic cycle—holding through bear market after bull market after bear market. Do not be confused, economic prosperity (bull markets) always results in economic decline (bear markets).

And think about what the 6-18 month time period means if you are invested in a mutual fund: If your mutual fund was truly "trading" correctly—as you are paying them to, the money manager would be getting in and out of positions fairly regularly and going to cash periodically when he saw the beginnings of a bear market. But unfortunately, and my heart goes out to you, many people lose tons of money in their mutual fund during bear markets. Ugh! Then they get scared at the bottom of an economic cycle and pull their funds because they did not know the "mutual fund game" was for the extra long term...

So how do I adapt your method to longer-term investing?
Trade off monthly and weekly charts using the same techniques I teach, then use dailys to fine tune your entry; nearly all trading methods from any teacher are readily adaptable to any time frame. You will also want to read about economic cycles—this is very important; in fact, all traders should be familiar with this information. You can get a basic understanding of the various cycles which influence the market in the works of (yes, buy all of them):

• Short-term Trading In The New Stock Market by Toni Turner—Toni clarifies the cyclical nature of the market in chapter 5; also pay attention to the cycle chart on page 88.
• Jim Cramer's Real Money: Sane Investing in an Insane World by Jim Cramer—Jim goes into detail about how the interest rate cycle affects which stocks you should buy and sell in chapter 5; pay particular attention to the chart on page 115.
• Stochastics, Cycles and RSI by George Lane—This is the book that made me understand the market. Lane explains cycles purely from a technical perspective in this work.
• Stochastics for the Serious Trader by George Lane—The video clarifies the material in Stochastics, Cycles and RSI. You must have both to understand how Lane tweaks stochastics; he is a good teacher.
• Elliott Wave Principle: Key to Market Behavior by A.J. Frost and Robert Prechter—Although I do not use elliott wave in my trading, you probably should have a firm foundation in this method; it is used by many, many successful investors (including Dan Zanger).

Do you use candlesticks?
Yes and no. I use candlestick charts because they allow me to see price action better, but I do not use candlestick patterns in the traditional sense as I do not find them that useful. If you are interested in candlesticks I would recommend Japanese Candlestick Charting by Steve Nison.

What trading programs do you use?
Oh, this is a nightmare! I spent years trying to figure out how to do it for free or really cheap. Currently I use Metastock End-Of-Day and Amibroker Professional with free end-of-day data from Yahoo (Amibroker has a plug-in for this). I don't think I will be buying any more trading programs as these two do everything I need. If I had it to do all over again I would have probably just bought Metastock Professional and been done with it.

Metastock is expensive. Do you have any other recommendations?
Get the end-of-day version ($500) and use your broker for real time charts. Use QuoteTracker for intraday and StockCharts.com or Yahoo for long term. Use DailyFX charts for forex—they are pretty good, but be aware that they will "reset" your saved charts on your browser every few weeks and you will have to redo them. Amibroker is a wonderful platform if you have a real time data feed, but if you need to buy an EOD or a real time forex feed for Amibroker, Metastock EOD is probably a better deal along with your forex broker and DailyFX. GFT has great forex charts, but use “live stops” with them—as you should with all brokers, and fund your account with plenty of money; they say mini account, but for proper stop placement in forex using EOD trading you probably need $25,000 or more. I have also looked into TradeStation, but it was overkill for my trading style. I took TradeStation's $99 introductory course once; it is worth the money.

Are you a Metastock or Reuters representative?
No.

Are you an Amibroker representative?
No.

Are you a representative of or connected with any brokerage?
No.

Do you get any kickbacks, monetary or otherwise, from any of the products or books you recommend?
No. My paycheck comes from the teaching I do at a community college with the State of North Carolina, my full-time job. I teach human services, basically counseling at the 2-year community college level. I make a little money in my private psychotherapy practice—Asheville Counseling, and I make money in my brokerage accounts which I trade for myself. That is it. The only other money I get is from my mom, dad and grandfather for my birthday.

Are these really questions people sent in to you?
No, but some of them have been asked of me by people interested in the markets. The others are questions I deem important to trading and questions I expect people will ask me in the future. The trading goddess also grills me with questions and you can thank her for some of these.

What broker do you use?
OANDA and Scottrade. I have used Interactive Brokers when I traded futures; they are good.

What markets do you trade?
Primarily forex and the stock markets. I have traded futures and options in the past.

Do you teach about options?
Not much. I have never had much luck with them. Option methods require either a quick expansion of price, something I do not focus on enough in my trading to make them profitable, or lots of time and money, in the case of writing calls and puts. If you would like to focus on options I would recommend that you find a good options mentor (sorry I don't know of any) and that you paper trade them before putting any real money at risk.

That being said I can recommend a few books that have been enlightening on the subject:

• Mastering the Trade by John F. Carter—John talks about the way he uses options in chapter 16. This book should be on your shelf if you are a trader.
• Get Rich With Options by Lee Lowell—These are some of the most lucid writings on using options I have come across. If I had the money I would definitely be putting these methods to work.
• Trading Commodities & Financial Futures by George Kleinman—In this work Kleinman talks about options on futures. Again, if I had the money...
• The 5 Day Momentum Method by Jeff Cooper—This book is short, only 60 pages, and in it Jeff outlines a method for non-day traders. In chapter 6 he briefly talks about adapting options to this method.
• Additionally, Dan Zanger briefly mentions using deep-in-the-money options as an alternative to trading large amounts of stock in some of the articles that have been written about him. If I was trading size I would definitely investigate his method more.

What about mutual funds?
My knowledge of mutual funds is limited as I do not invest in them. What I can tell you is that the mutual fund manager is the most important aspect of any fund; I would thoroughly research a manager's track record before I put any money to work with them. Also, be aware that funds like to bring in well-known managers who then leave after the fund is established. I personally think this is kind of slimy. A good manager combined with the correct market direction is the only way to make money in a fund. William O'Neil of Investors Business Daily made an informative audio CD called How You Could More Than Double Your Money in Mutual Funds that has some good advice for mutual fund investors. If you have a great deal of money and don't want to manage your own account, you may want to consider a hedge fund.

What is a hedge fund?
A hedge fund is essentially a very small mutual fund run specifically for high net worth individuals. Because of their legal structure, unlike mutual funds, hedge funds can go long or short and trade in many, many different markets. Often portrayed in a negative light by the news media, this is a definite opportunity I would persue if I had money that I didn't want to trade for myself. Hedge funds essentially do for a small group of select investors what professional traders do for their own account. Good hedge funds provide returns of 30, 50 or even a 100 percent or more per year.

If you want to hire a hedge fund manager you need to be an "accredited investor", meaning have a net worth of $1,000,000 or more or make a minimum of $200,000 per year. Additionally corporations and even pension funds—yes even the pension fund of the corporation you work for, frequently hire hedge funds to trade their employees' pension money. Hedge funds are excellent investment opportunities if checked out thoroughly. It always strikes me as odd to see the news media or congressmen grandstanding about how bad hedge funds are when it is very likely that they have money invested in them directly or indirectly (through their pension fund). A great book to to learn about these investment vehicles is The Fundamentals of Hedge Fund Management by Daniel A. Strachman. A brief review of his book is on my Reading List page.

Thirty, fifty and a hundred percent, that not fair! Everyone should be able to invest their money wherever they want.
I agree, but the US government doesn't. If you are a citizen of the United States, for the most part, you will have to have a great deal of money to invest with a hedge fund in this country. The government's logic is simple when you understand the potential legal and political problems.

Recently a very bad man, Bernie Madoff, stole a great deal of money from a number of wealthy investors. Now think about what would happen if the government allowed "small investors" to invest in hedge funds and a Madoff-like scandal occurred: Instead of a difficult legal mess, the government would have a huge political morass akin to what occurred at Enron. Imagine a bailout for tens of thousands of investors similar to the housing crisis. Ugh!

But I want to invest in something that makes me money! I don't want no stinkin' mutual fund that makes me 8-12% per year. What can I do!?!
My suggestion is that you look into managed futures, also known as commodity pools, for a portion of your investment capital. Look for a money manager with a good track record. Sometimes commodity pools can be good alternatives to hedge funds for investors that do not meet capital requirements. You want to do your due diligence and check out the fund manager thoroughly. You had better pay attention to that last sentence.

How do I check out a fund manager?
I would look at their track record first. William O'Neil says of mutual funds (and I would apply this to all funds), that examining the last three years of performance is very important. Funds often have a good year or two, but it is hard to have three good years in a row unless you really know what you are doing. Best practice requires the fund's track record to be formally audited and some high net worth investors will not even consider a firm that is not associated with one of the big four accounting firms (PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG).

After you are convinced that the fund is making the money which it says it is, I would contact any boards or organizations that the manager is registered with to see if they have any "dings" on their record. Be aware that many hedge fund managers are not required to be registered with regulators because hedge funds are not offered to the general public. I would also check out the accountant that manages the fund's records. CPAs have a board that they answer too just like stockbrokers, doctors, psychologists, etc.

Next, meet with the manger in person, if you have not already done so. Ask lots of questions. I wouldn't work with anyone who didn't "feel right" to me and do not ever feel bad about asking questions. The book I mentioned earlier, The Fundamentals of Hedge Fund Management by Daniel A. Strachman, is a good place to start to help you formulate questions. If you have a close personal friend or relative in the finance field ask them to accompany you to the meeting or at least to help you formulate a list of questions (offer to pay your friend/relative for their time).

You will also want to understand the fund's strategy. Sometimes trading methods can be complex, but you should at least have a basic understanding of what the fund is doing to make money. I would walk away if I could not get my head around their strategy; they should be able to articulate their strategy to you in easily understandable terms. Some investors require the manager to be very open with their records and walk away from anyone who is not; that is OK.

What is mutual fund timing?
Now you're talking my language. Timing mutual funds is essentially trading them like you would do a stock or ETF. If I specifically wanted to trade mutual funds I would read everything I could get my hands on by people who had done this and consistently made good returns. I have only come across two mutual fund "traders" in my studies, but this does not mean there are not many, many more out there: Steve Lescarbeau who is interviewed in Stock Market Wizards: Interviews with America's Top Stock Traders by By Jack D. Schwager and Gary Smith who wrote How I Trade for a Living.

If you really want to time mutual funds like a professional money manager you are going to have to learn the business like you would if you were becoming a professional stock trader. And you probably know what I am going to say now. Before you put any money at risk you need to be consistently profitable on paper first. I am not sure what the risk parameters are for mutual fund timers and if they use a 1% stop loss or not—this is not my business.

I personally would look at lots of randomly-selected historical mutual fund charts and go through these using my method over and over until I could time (trade) them correctly before I put any money at risk. It also might be worthwhile to invest in some:

•  Back testing software (I am not sure what is best here. Metastock is worth looking into, but I would also look at what others are using)
•  Training in the back testing software
•  A good mentor

Yes, my stock trading method would be a good place to start to understand fund entry and exit, but you would also be smart to look into specific mutual fund trading methods. Like I said, read everything you can get your hands on.

Do you recommend any advisory services?
Yes, your own knowledge. Beyond that Tom Keene on Bloomberg is a wonderfully intelligent newscaster that knows more about the markets than most traders. Planet Money is a good NPR podcast for learning broad market basics. Jim Cramer is awesome. Don't listen to the idiots who don't understand his knowledge base. My favorite place to go for stock picks is Dan Zanger owner of Chartpattern.com—he does a weekly radio show and usually mentions a good pick or two. Dan's newsletter is a great deal; if I had to pay money for one item for stock picking it would be this.

Will you speak to my investment club/group for free?
Maybe if you are local or if I happen to be in the area.  Travel is expensive... I make money in the market, but it is not yet my ATM machine. Give me a call and talk to me and throw me your proposal. I base my decision to speak on the size of your group and your funding.

What kind of sales pitch are you going to give me or my group if we have you speak?
I hate sales pitches so I can promise you it will be short and sweet: I'll put out some business cards, say the name of my web site and answer any questions people have about my service or my credentials. My knowledge base sells me very well; I don't need to do much pitching.

Will you speak at my trading conference for free?
No. I am offering this service primarily to be paid. My entire purpose of this web site is to fund my trading account by creating interest in my services.

Do you fly?
Only if it is out of the country and I am being paid well. I don't like airplanes. Trains are OK.