"A wise trader knows what he knows and what he doesn't." He knows his methodology-both the good and especially the bad. He knows to be patient while waiting for setups and to be patient once he enters.
Recently, I wrote about the 4 billion dollar Ackman loss. Again, I didn’t do this to be schadenfreude but rather because of a valuable lesson to be learned. I went to bed thinking about trends and woke up thinking about them (as you get older, what you think about all the time changes).
In this episode, I continued my discussion on volatility, following up on the setup in the Q's/Nasdaq. I also continued my discussion on the Textbook TKO setup in the Qs. Further, I discussed the danger of derivates such as the VXX. And last, but certainly not least, I answered your questions and analyzed your stock picks.
There are only three things that you need to become a successful trader: A viable methodology, a solid money & position management plan, and the proper mindset to follow it. That’s it. In this second part of this series, I’m going to lay out a very simple, yet robust, money & position management plan but first, I’m going to stay true to “Random Thoughts” and tell some amusing anecdotes.
To become a successful trader, first and foremost, you‘ll need A methodology. I realize that this is a bit of a “Captain Obvious” statement but you’d be surprised how many people just “wing it.” I’m not referring to novices trying to find their way by sampling methodologies. That’s understandable. I’m referring to the many