You all too often hear that 80-90% of those who try to make it as traders fail.
There is no question that it is a very tough profession and for some perhaps not a good fit.
I wonder about this statistic though. Many professional traders failed their way to success. They failed forward as it’s said.
After all, so much of trading is learning to take losses and building the emotional capacity to trade your plan without deviation.
Perhaps the statistic changes to being slightly more favourable each time a trader gets back in the ring for another round.
Admittedly it takes a particular kind of resilience to do this.
One thing is certain finding good training and mentoring can help you to short cut some of the steep learning curve. It’s very important to find someone you trust and who’s approach gels with you.
You also have to be open to the possibility that you can be a successful trader. If you aren’t, you have pretty much guaranteed you aren’t going to achieve what you want.
Breaking the four-minute-mile used to be considered scientifically impossible. Then Roger Banister broke the barrier in 1954. His achievement opened up the possibility that it was possible to others. Over the next few years many more people broke the barrier.
It took one man to show that it was possible. That was all that was needed to allow others athletes to make the mental shift and open to the possibility they could do it too.
Read the Market Wizards books (listen to Michael’s Jack Schwager Hedge Fund Market Wizards Video Interview) and read around this site for countless other examples of those who have achieved what you want. Ask yourself are you open to the possibility that you can do it too?
Be sure that you aren’t getting in your own way of being a trader. You may need to open up the possibility that you really can.
What do you think about the statistic? Does the failure rate decrease the more someone perseveres? Let me know what you think in the comments.Continue Reading...
Do you remember the Euro Crisis? The Fiscal Cliff? Yes… those media reports about Germany throwing money away by financing Greece? Spain going under? Greece austerity? How about those violent street demonstrations? China slowdown?
You see, the media’s job is to sell advertising — nothing more and nothing less, and in order to do so, the media is attempting to pull your emotional cords, such as anger and fear and keep you tuned in.
As a trader you have two choices: let the media play with your emotions, or shut down the noise and pay attention to the markets, after all the SP500 is up 12% this year, Euro Stock index up 8.55%, Germany up 23.43% and the Hong Kong index is up 16.5%.
Did you catch any of these returns, or did you let the Fiscal Cliff, Euro Crisis, or the China slowdown media-fest keep you out of these markets?Continue Reading...
I spoke with Jack about his new book Market Sense and Nonsense: How the markets really work (and how they don’t). The Kindle version is available now, the hardcover on 11/6.
This is Jack as analyst, not as trader interviewer. I think the insights herein will benefit investors especially over traders, although both are served well. Jack totally destroys the EMH in this book. He also debunks a great deal of conventional wisdom for the investor, which I think will be shocking at first. Why? Conventional wisdom “feels good” and to go against the grain so to speak as an investor takes a great deal of emotional intelligence — and a strong inner voice — which most investors don’t have. Good trading and investing oftentimes does not “feel” good at all. It’s much easier for a newbie or amateur to go with the crowd and succumb to one’s emotions. What feels safe is normally not a proper risk management decision for the untrained.
At the end of each chapter, Jack delineates several “Misconceptions” that I believe are worth the price of the book. One in particular deals with when it’s NOT a good idea to just blindly buy the S&P 500 after it’s gone up a certain amount.
Market Sense and Nonsense is an objective take on popular investment themes that is backed with a great deal of data to support its claims. I think the conclusions in this book will surprise most of its readers and that’s a good thing. At least they will be armed with strong arguments to bring up with their advisors.Continue Reading...
One of my friends sent me this the other day. I remember doing the interview, but didn’t know it was available.
I’m not a day trader, nor do I suggest that you considering becoming a day trader. Too much work for too little gain. I don’t consider myself a “day trading expert” either…at least in the manner that they are using the expression.
“If you don’t know who you are, it doesn’t matter what you know about trading.”Continue Reading...