ravi
9th January 2009, 02:11 PM
Every successful trader, investor,money manager,etc.. has a system
that fits them. Some are long term, some mechanical, some intuitive,
day traders, scalpers, arbitrage, value, momentum.The system itself is
not the important factor. What is?, Is that the system fits their unique personality.
The system does not matter.
I've heard of value investors (Ramesh Damani,
Rakesh Jhunjhunwala) who make untold millions from the stock market.
I've heard of day traders taking home huge profits.
I've heard of a dancer making $2,5 million from Momentum trading.
What do they have in common? As you can see it's not the system but
they operate a style of trading that they are both happy with and
excel at. They wouldn't dream of trading any other way. No-one told
them to trade this way it just happened this way.
To be a successful day trader you have to love the short term
up and downs of the market during the day. Being in contact with quotes
for hours at a time. Yes, there are a number of traders making very good
incomes from day trading, but there’s many more who lose their shirts
within a couple of months and don't even find out whether day trading
is suited to their temperament.
For some traders buying a stock and holding on to it for a year as
it doubles in price would be torture. Although long term investing can
offer fantastic rewards with very little work unless you have the
patience and discipline to ride your profits all the way to the top
then you'll never succeed with this method.
It's a little like choosing a career. I remember reading a book some
time ago about the world's best managers. And one characteristic the author
emphasized with all these top achievers was their LOVE for their chosen
careers. Most of them said they couldn't believe they were getting paid
to do something they loved so much. It's no different in trading.
You will only be a top trader if you trade a system which you simply
love to trade. You wouldn't swap that way of trading for anything. And
the profits you make, well that's just icing on the cake.
How do you find a system you are happy with? You have to work backwards.
First work out your objectives!
Ask these questions:
* What annual rate of return do I want?
* Do I want to trade full time, part time, hardly any time?
* Can I handle the stress of day trading and short term trading?
* Do I have the patience for long term trading?
* What kind of personality am I? Do I need lots of action, Do I need
to make decisions all the time?
* What trading books have i read and which top traders do I most admire
and why? Could you easily copy their style of trading?
Strive to find a way of trading you will be comfortable with and aim to become the world's best at this style of trading.
If you are trading a system that does not fityour personality you can never gain the confidence nor the results to truly make the big profits. If you are a new trader or an unsuccessful one then I suggest you start by asking your-self "What kind of trading suits my personality?" Spend lots of time getting
this correct as this is you foundation. Build a strong foundation and
your trading system will be strong and stand the test of time.
Build a weak foundation and your trading system will crumble along
with your money.
This is where the majority of traders go wrong. They have no idea which
style of trading suits them. They keep buying into the latest software,
or listening to the new guru, hoping this will change their trading results.
Most never get to know what successful trading is all about as the average
trader lasts SIX months. I believe any trader who can last over TWO years
in the market will probably go on to become one of those rare breeds:
A Stock Market Winner. Why? Because after two years they start to develop
a set of rules that fits them. They start trading a way they are comfortable
with. Unfortunately, in their haste to make a ton of money, most traders
will never get two years experience before they lose their money and/or
their interest.
Say it today.
" I will find a system that fits me and I will become THE world's best
trader at this ONE style of trading"
Go and get to work. There's a lot of soul searching to be done.
that fits them. Some are long term, some mechanical, some intuitive,
day traders, scalpers, arbitrage, value, momentum.The system itself is
not the important factor. What is?, Is that the system fits their unique personality.
The system does not matter.
I've heard of value investors (Ramesh Damani,
Rakesh Jhunjhunwala) who make untold millions from the stock market.
I've heard of day traders taking home huge profits.
I've heard of a dancer making $2,5 million from Momentum trading.
What do they have in common? As you can see it's not the system but
they operate a style of trading that they are both happy with and
excel at. They wouldn't dream of trading any other way. No-one told
them to trade this way it just happened this way.
To be a successful day trader you have to love the short term
up and downs of the market during the day. Being in contact with quotes
for hours at a time. Yes, there are a number of traders making very good
incomes from day trading, but there’s many more who lose their shirts
within a couple of months and don't even find out whether day trading
is suited to their temperament.
For some traders buying a stock and holding on to it for a year as
it doubles in price would be torture. Although long term investing can
offer fantastic rewards with very little work unless you have the
patience and discipline to ride your profits all the way to the top
then you'll never succeed with this method.
It's a little like choosing a career. I remember reading a book some
time ago about the world's best managers. And one characteristic the author
emphasized with all these top achievers was their LOVE for their chosen
careers. Most of them said they couldn't believe they were getting paid
to do something they loved so much. It's no different in trading.
You will only be a top trader if you trade a system which you simply
love to trade. You wouldn't swap that way of trading for anything. And
the profits you make, well that's just icing on the cake.
How do you find a system you are happy with? You have to work backwards.
First work out your objectives!
Ask these questions:
* What annual rate of return do I want?
* Do I want to trade full time, part time, hardly any time?
* Can I handle the stress of day trading and short term trading?
* Do I have the patience for long term trading?
* What kind of personality am I? Do I need lots of action, Do I need
to make decisions all the time?
* What trading books have i read and which top traders do I most admire
and why? Could you easily copy their style of trading?
Strive to find a way of trading you will be comfortable with and aim to become the world's best at this style of trading.
If you are trading a system that does not fityour personality you can never gain the confidence nor the results to truly make the big profits. If you are a new trader or an unsuccessful one then I suggest you start by asking your-self "What kind of trading suits my personality?" Spend lots of time getting
this correct as this is you foundation. Build a strong foundation and
your trading system will be strong and stand the test of time.
Build a weak foundation and your trading system will crumble along
with your money.
This is where the majority of traders go wrong. They have no idea which
style of trading suits them. They keep buying into the latest software,
or listening to the new guru, hoping this will change their trading results.
Most never get to know what successful trading is all about as the average
trader lasts SIX months. I believe any trader who can last over TWO years
in the market will probably go on to become one of those rare breeds:
A Stock Market Winner. Why? Because after two years they start to develop
a set of rules that fits them. They start trading a way they are comfortable
with. Unfortunately, in their haste to make a ton of money, most traders
will never get two years experience before they lose their money and/or
their interest.
Say it today.
" I will find a system that fits me and I will become THE world's best
trader at this ONE style of trading"
Go and get to work. There's a lot of soul searching to be done.