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“Trade and prosper – it is an attainable American dream.” – Mark. D. Cook
As a trading expert, I’ve noticed different ways in which people view trading. Some people love trading, some people hate it. Some think financial websites are great; some feel those websites don’t help ultimately. Some like to overtrade, some open very few positions. Most souls are too busy to speculate on a full-time basis, something that doesn’t really matter… Yes, it’s not possible for everybody to become a trade. There are conflicting opinions and there are many ways to make money, so to speak. But I’d like to point out that most of the wealthiest people in the world gain their immense riches from the stock market and the real estate investment. Victorious market wizards have been trading the markets for decades, and in those periods their love for trading hasn’t been reduced. Rather, they have earned a wealth of knowledge and returns from actively participating in the markets and sometimes helping neophytes be the best traders they can be. It’s highly intriguing to see people sharing testimonies about their success in the markets and making decent income from their trading activities. If you can read the articles in this series and follow the secrets contained therein, you’d potentially see yourself being ultimately transformed into a competent trader.
Charles Kirk, quoted at the end of this article, said recently in an interview in TRADERS’ that when he looked back, he was very fortunate in terms of timing in his trading career as he started trading full time when the market was performing at its very best. What he lacked in knowledge and skills, a benevolent bull market made up for. They say bull markets make everyone look like a genius and that was certainly true in his case. Like many traders just starting out, he traded very aggressively and those aggressive trades paid off. Unfortunately, at the beginning, he’d zero respect or any real appreciation for proper risk management because trading was so very easy for him early on. As things go, the good and easy times where everything he touched turned to gold didn’t last. He started experiencing discouraging losses.
Rather than quitting, Charles Kirk began to learn what it takes to be a successful trader – a process that took him a considerable amount of time. He eventually achieved him aim, and now, he makes a living from trading.
Some who were thought to be trading experts are no longer in the markets. They made money when trading was favorable to them, but lost heavily when things went awry. They stopped trading because long-term success eluded them. We can never be inspired by former traders who have quit trading, but we can be goaded towards successful by market wizards who have been enjoying success – beating the markets on annual basis. Their traits can be learned and imitated by you as well. Those traits are revealed systematically in the articles in this series.
Traits of Successful Market Wizards
1. Victorious market wizards have found what work for them in trading: Every successful trader has found trading ideas that work consistently. Without trading principles that work, any trader would soon experience significant failure, for it’ll be that they don’t know what they’re doing in the markets. Those speculating without killer trading plans might enjoy transient success, but you would need killer trading plans in order to be a permanently victorious trader. You would save your nerves by simplifying your trading. Some of the trading ideas that work would be revealed in my future articles on this website.
2. Victorious market wizards take money management serious: For you as an individual trader, it is imperative for you to ensure that you’re not betting too big on an individual trade. Those who bet too big may win jackpots, but they tend to loose too big when things turn against them. There is a clear disparity between trading and gambling. Personally, I wouldn’t risk more than 1% of my portfolio per trade. Victorious traders do that for their permanent victory, and you should be able to do that too.
3. Victorious market wizards sell short in downtrends and go long in uptrend: The best trading method remains going with the flow of the markets, not the other way round. As Dr. Van K. Tharp puts it, the trader’s struggle with the market is the problem. Market wizards trade only clear market propensities (not going against the propensities), and they stay out of equilibrium/trendless markets. If the markets are going south, they go south. If the markets are going north, they change to a northward bias. Really, you won’t be able to handle your open positions skillfully, if you’re experiencing problem handling your reactions to the markets. If you find it difficult to trade the markets with a measure of success, I would like to give you a simple advice. Switch to bigger timeframes. Short a predominantly falling market and purchase some contracts in a predominantly rising market.
4. Victorious market wizards wait for confirmation of a change in the trend, before they change their bias: They don’t rush to take the opposite side of the trend because some fundamental facts suggest that or because of corrections in the price. They wait for the market to turn before they change their positions. Market wizard acknowledge that the market can’t be prognosticated with 100% certainty. Nevertheless, the position they take when fundamentals change is often based on tactical speculative method coupled with effectual chart reading techniques. This is one timeless trading principle, and I’d still write an article to elaborate more on the importance of trend-following and the danger of going against the trend. Desist from pinpointing turning points in the markets when you think prices are too dear or too cheap (using money management based on your safety rules), till the market has shown that the bias is completely over.
Conclusion: The most important point is that are many market speculators that possess unhelpful biases prior to opening orders and prior to sustaining any negativity. Realistically, majority of market players have good trading knowledge, but often freeze when it comes to executing trading decisions when needed. This procrastination makes them exasperated as the time runs out on them. Vividly, this is a great challenge when they need to be courageous in their trading ideas and in the execution of those trades. As someone who needs to trade effectively, you would need to stick to trading principles that work, or else you would be frustrated.
Part 2 of this series is now available.
This article is ended with the quotes below:
“It wasn’t until my father passed away one month after my law school graduation that I knew that trading for a career was the right decision. The very last conversation I had with my father in his hospital room is one I’ll never forget. In his last moments, he desperately urged me to ‘do what I love’ as a career. He told me that he’d enjoyed a very happy life because he really loved his work and how much of a difference that made for him. He worried that I was making choices that would prevent me from following my passion and urged me to follow my dreams. Shortly after, I asked my wife to give me 2 years to prove that I could make a living by trading instead of being a lawyer as I’d planed.” – Charles Kirk
“You have to believe that you will become the next great trader on the street.” – Mike Bellafiore
