I spend a lot of time talking about the psychological side of trading. My recent interview in Traders Magazine focused solely on the mindset necessary for successful trading.
Why do I spend so much time and energy discussing the psychology of trading? Because the longer I’m involved in this game, the more convinced I am that having the right mindset is the most important aspect of succeeding as a trader.
Learning how to trade a proven trading system is relatively simple. The rules laid out in a quality system should dictate the vast majority of your trading decisions. A successful system, with predetermined buy points and sell points, should take the guesswork out of your trades.
Having the mental discipline to FOLLOW a proven trading system is where most people get tripped up. Trading is an emotional battle and when emotions are involved, dumb mistakes get made.
My experience as a trading coach, where I work with traders from all over the world, has hammered home the importance of one’s mindset. [click to continue…]
You’ve been lied to.
You’ve been told that to achieve financial success, you have to work endless hours and sacrifice a happy family life. You’ve been told that successful people got to where they are by being ruthless and/or dishonest. You’ve been told that life is unfair and success is just a matter of random luck.
In short, you’ve been told that the American Dream – the idea of going out and creating a peaceful, happy, and prosperous life – is no longer achievable.
A poll conducted by YouGov earlier this year reports that 63% of Americans now say that the American Dream is either impossible to achieve or that they are unsure whether it’s possible to achieve. That percentage of negativity is staggering to me. The poll question didn’t ask if the American Dream was unlikely or difficult, but whether it was IMPOSSIBLE for most people to achieve. The majority of respondents said it was impossible rather than possible.
I think people with this pessimistic viewpoint have it all wrong. I believe the American Dream is just as achievable as it ever was – even more so, actually, thanks to the increased opportunities given to us by new technologies. [click to continue…]
If you read books about how to achieve your goals in life, you’ve probably come across what is known as “The Success Equation.”
The Success Equation is this: E + R = O
The E stands for Event, the R stands for Response, and the O stands for Outcome.
Event + Response = Outcome
Accepting this equation forces you to take personal responsibility for where you are in life. It forces you to accept the fact that while you don’t control the events that occur around you, you DO control your responses to those events. And when you control how you respond to an event, you take control of the outcomes in your life.
The power to control the outcomes in your life guarantees your success (or failure). [click to continue…]
“Most of all, long-term success in the stock market comes from discipline, the ability to consistently execute a sound plan and refrain from self-defeating behavior.” – Mark Minervini
When I read the above quote in Mark Minervini’s new book, Trade like a Stock Market Wizard, I immediately grabbed a pen and underlined it. That one sentence holds THE secret to success in the stock market.
And that’s not an understatement.
You see, while I’ve been an active trader for years, I’ve also been teaching and coaching other traders for the past six years. My newsletter and coaching program started out small, but it’s now read by fund managers and independent traders all over the world. It’s read by multimillionaires who run giant hedge funds and it’s read by independent traders who are just starting out. [click to continue…]
One of the great things about publishing a trading newsletter is that I’m able to assume the role of trading teacher. Not only do I teach other traders how to use the Darvas System, but I also field numerous questions every week from traders all over the world.
I believe that I benefit from answering these questions just as much (if not more) than those I’m providing the answers for. When I answer the “how’s” and “why’s” behind every trading technique I use, it helps me to take a step back and remind myself of the principles that work. It clarifies and reiterates the process for me, which is a great benefit to any trader.
I’m also able to see, again and again, the most common problems that plague traders.
With my newsletter now in its fourth year of publication, I can tell you with certainty that there are seven brutal trading mistakes that are repeated again and again by traders from many different backgrounds.
Review the list below and make sure you’re not committing any of these seven deadly trading sins… [click to continue…]
I’ve always believed there is a direct parallel between success in sports and success in the stock market.
For example, to succeed in the stock market, one must first find the investment strategy that is right for them. This is very similar to the way a football coach chooses the right offense for the team he is coaching.
In football, there’s no ONE right strategy that guarantees success. Especially at the college and high school levels, coaches win championships using a variety of offensive systems. Some prefer to grind it out with a conservative running game while others like to spread it out with a wide open passing attack. Both strategies work. Both styles win lots of games when utilized correctly.
The key for coaches is to find the proven system that best fits their player personnel and their own personality.
I think it’s interesting to note some parallels between the most successful offenses in football and the most successful investment strategies implemented in the stock market.
Below, I’ve showcased the investment world’s equivalent to the football world’s most well-known offenses. You just might find that the style that would best fit you as a football coach fits you best as an investor. [click to continue…]