Our tax code is enormous and very complicated to many people of The United States of America. What we need to do is scrap the entire tax code. Abolish the 16th Amendment that allows the confiscation of our hard earned money. We implement a “Fair/Flat Tax” system to fund the necessary government programs like health, infrastructure, and the security of our borders and interests.
This implementation would not be overly difficult. We already collect sales tax for most state and local governments. We can do the same at the federal level. There should NOT be class warfare when discussing a Federal Consumption/Sales Tax. Local sales tax has never had the same debate. If a community needed to raise a sales tax to benefit a project, it may get voted on or just the tax is just implemented to fund the project without any adverse dialog of how it may affect the poor or wealthy.
When Sales taxes are raised, no one ever complains about how the poor need subsidies or it’s unfair. A so called "rich" person buys more expensive items. A so called "poor" person may not. A “Fair/Flat Tax” will allow a diverse collection of taxes without the countless resources wasted trying to find and apprehend the ones that evade the law. Anyone entering our country will have to pay the tax when items are purchased. This includes tourist, diplomats, and ALL walks of life. No One is excluded. The I.R.S. and the numerous accountants can focus more on fraud of Social Security, Disability, Medicare, ect. The Fair/Flat Tax gives us the ability to thwart offshore bank holdings. It will no longer benefit individuals to park money offshore because you will be taxed on what is spent, not earned. Monetary transactions from any source even people working “Under The Table” will finally be taxed. Along with the countless "Illegal" immigrants from all nations pouring through our borders.
With a Fair/Flat Tax we charge a simple 10-15% tax on ALL sales. Let’s not gum this up by including things and not. Really, all that is needed is the same that is done now with all the working documents you fill out with a job. The biggest difference is You get to take home every dime you earn. IT IS IMPERATIVE THE FEDERAL GOVERNMENT MUST PROVIDE A BUDGET FOR THE YEAR! The Fair Tax CAN NOT be raised without a 90% approval by congress AND a 75% Majority vote by the people. The raising of the Fair/Flat Tax CAN ONLY come on the years Presidents are being voted on to ensure the public has transperency. Corporate tax rates can also be flat on the consumption of that company capital and service needs. With the added scope an overall Flat/Fair Tax may be only 6-7% instead of the 10-15%. The lowering will be dependent upon debt reduction.
Furthermore, congress will only convene at least four times a years for a two-week period each time to discuss matters. The rest of the time, members of congress must stay in their elected areas to determine the best possible resolution for the people they are to represent. This however can be overturned at times of national crisis. By doing this, we shake up Washinton from the coziness of lobbyist affecting our policy makers.
Close to 90% of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit -- and more importantly, do it consistently.
How do they do that?
That's an age-old question. While there is no magic formula, Elliott Wave International's Senior Trading Instructor Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful.
We don't claim to have found The Holy Grail of trading. But sometimes a single idea can change a person's life. Maybe you'll find one in Jeffrey's take on trading. We sincerely hope so.
Why Do Traders Lose?
If you've been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn't seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can't seem to prevent that invisible hand from depleting your trading account funds.
Which brings us to the question: Why do traders lose? Or maybe we should ask, "How do you stop the Hand?" Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.
Fatal Flaw No. 1 -- Lack of Methodology
If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won't work over the long run. If you don't have a defined trading methodology, then you don't have a way to know what constitutes a buy or sell signal. Moreover, you can't even consistently correctly identify the trend.
How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn't matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can't fit it on the back of a business card, it's probably too complicated.
Fatal Flaw No. 2 -- Lack of Discipline
When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously.
Fatal Flaw No. 3 -- Unrealistic Expectations
Between you and me, nothing makes me angrier than those commercials that say something like, "...$5,000 properly positioned in Natural Gas can give you returns of over $40,000..." Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations.
Yes, it is possible to experience above-average returns trading your own account. However, it's difficult to do it without taking on above-average risk. So what is a realistic return to shoot for in your first year as a trader -- 50%, 100%, 200%? Whoa, let's rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them -- and achieve them -- you will fend off the Hand.
Fatal Flaw No. 4 -- Lack of Patience
The fourth finger of the invisible hand that robs your trading account is Lack of Patience. I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction.
That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you're a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week.
All too often, because trading is inherently exciting (and anything involving money usually is exciting), it's easy to feel like you're missing the party if you don't trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade.
How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don't worry about missing an opportunity today, because there will be another one tomorrow, next week and next month...I promise.
I remember a line from a movie (either Sergeant York with Gary Cooper or The Patriot with Mel Gibson) in which one character gives advice to another on how to shoot a rifle: "Aim small, miss small." I offer the same advice in this new context. To aim small requires patience. So be patient, and you'll miss small.
Fatal Flaw No. 5 -- Lack of Money Management
The final fatal flaw to overcome as a trader is a Lack of Money Management, and this topic deserves more than just a few paragraphs, because money management encompasses risk/reward analysis, probability of success and failure, protective stops and so much more. Even so, I would like to address the subject of money management with a focus on risk as a function of portfolio size.
Now the big boys (i.e., the professional traders) tend to limit their risk on any given position to 1% - 3% of their portfolio. If we apply this rule to ourselves, then for every $5,000 we have in our trading account, we can risk only $50 - $150 on any given trade. Stocks might be a little different, but a $50 stop in Corn, which is one point, is simply too tight a stop, especially when the 10-day average trading range in Corn recently has been more than 10 points. A more plausible stop might be five points or 10, in which case, depending on what percentage of your total portfolio you want to risk, you would need an account size between $15,000 and $50,000.
Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade. And that doesn't even address the size that they trade (i.e., multiple contracts).
To overcome this fatal flaw, let me expand on the logic from the "aim small, miss small" movie line. If you have a small trading account, then trade small. You can accomplish this by trading fewer contracts, or trading e-mini contracts or even stocks. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the rough spots. Conversely, if you risk 25% of your portfolio on each trade, after four consecutive losers, you're out altogether.
Break the Hand's Grip
Trading successfully is not easy. It's hard work...damn hard. And if anyone leads you to believe otherwise, run the other way, and fast. But this hard work can be rewarding, above-average gains are possible and the sense of satisfaction one feels after a few nice trades is absolutely priceless.
To get to that point, though, you must first break the fingers of the Hand that is holding you back and stealing money from your trading account. I can guarantee that if you attend to the five fatal flaws I've outlined, you won't be caught red-handed stealing from your own account.
Free 6-Page Report: How the Wave Principle Can Improve Your Trading
95% of traders fail. Are emotions damaging your trading?
It's time to remove emotion from your trading and learn to manage your positions objectively -- so you can make the most of each high-confidence trade set-up.
We now offer an exclusive page dedicated to Elliott Wave International. Find the page to the left for incredible insight about the markets. Below is an example of "Free Content" you would be able to access by joining the EWI Club for FREE! Join Here EWI Club
Some of the greatest problem solvers in history -- Albert Einstein, for example -- know that the secret to solving complex problems requires simplicity.
Einstein's simple equation (E = mc²) revolutionized math and science because it offered a single simple solution to so many of the world's mysteries.
New research from the desk of market technician Robert Prechter reveals that a relatively small (yet growing) group of investors has discovered a universal truth about investing that stands to revolutionize the fields of finance and economics.
Prechter's insight is simple yet counterintuitive. And in a new 23-minute video presentation called "How Market Losers Think -- and How to Stop Doing It," Prechter shares his one simple insight that will change the way you invest forever.