Thought For A Day
Richard St John – Success in 8 Words
Nuggets
- Work to understand price
- Price does not move in a straight line
- Big moves take time
- Volatility is your friend and helps to compress time
- Although volatility is your pal, it can cut both ways
- If a stock moves 30% a day, then you can’t trade with a 5% stop
- Don’t expect a volatile stock to stop behaving as it has been and only move in your favor just because you’re now in it. Unless you’re Bill Clinton, what is, IS.
- Observe but be slow to shift gears — we are trend followers, not predictors
- It’s the market’s “job” to shake you out
- The market will do what it has to do to create the most pain (for the most people)
- The market will often do the obvious in the most un-obvious manner
- Err on the side of the longer-term trend
- DO wait for entries
- DO use protective stops
- DO trail and scale as offered
The importance of success in succeeding at trading.
Different shapes and forms.
Failure comes in all different shapes and forms. The distance you fall after a failure, time it took to get to the failure,and whether you get back up determines that shape and form. I realize there are a million posts on why failure is important but success is important, especially in trading.
Failure is different in trading.
Failure/losing in trading is not the same as failure in other contexts. What is working right now is always changing. What happens to many traders is that they waste money until their system is working again or they run out of money before it happens. I believe in having a process so you can adapt to that change. When you find something that works continue to do it till it does not work. A 100x easier said than done.
Trading is gambling for some.
Trading is not easy because things change just enough to throw everything off. If you are not willing to change, trading does become gambling. I have seen many traders make it because of the market and be gone the next month. The great thing about struggling or learning from those who have struggled is that they were forced to create a process to manage this change.
Always playing catchup.
Many traders are just a a few steps behind. They will make just enough to keep them going. The market continues with some stability allowing the trader to close the gap. But they are tied to a strategy and the gap will eventually widen again when the change happens.
Being in the right position.
Getting yourself in the right position is a huge portion of becoming a success. Another part is making the necessary changes. Those that depend on a process and not a strategy are giving up instant success for long term gains.
Here are two tips:
Consider the process.
Learn as much from your losers as you do from your winners.
Failure is important in success but do not overlook the importance of success in succeeding.