iCharts Discussions

[Luckytrader]

What It Takes to Win in the Markets

By Brett N. Steenbarger


Note: The following is an excerpt from Gail Osten’s interview with Brett Steenbarger in the March, 2003 issue of Stock, Futures, and Options (SFO) magazine entitled “The Windmills of Your Mind and the Pathway to Your Trades”. The entire interview can be accessed at www.sfomag.com.


Gail Osten: I have to believe that the majority of people in this world are part-time traders.

Brett Steenbarger: I think that’s true, so maybe even more important than whether they are in the market part-time or full-time is how much time they’re spending researching the markets and preparing their trading, because that ends up being a big part of the full-time commitment.

Gail Osten: OK. Then I can make the differentiation between a part-time trader that is well-prepared and one that just pretends he or she is.

Brett Steenbarger: I’ll give you a great personal example. The last two days of trading, I have been in the market a total of 30 minutes—that’s maximum. Definitely not more. I’ve placed three trades in the last two days, and I’ve been in the market less than 30 minutes total. In those two days, I have easily spent 10-12 hours in preparation. So it gives you an idea of what full-time commitment means. It’s not simply being in the market full-time; it’s working at your craft. And to do that, you’ve got to love it. You’ve got to love finding the patterns, discovering the patterns, researching. You have to enjoy the discovery process every bit as much as you love getting in there and taking your profits.

… No one reasonably pretends that someone is going to become a master surgeon or a chess champion or a master artist by doing it on a part-time basis. I think the same is true for trading. So much of the element of success comes from the long hours of research and immersion in the markets, that it becomes a full-time enterprise—even if you’re not necessarily trading every minute of the day in the pits.

[svkum]

from some article
More than 90% of common investors/ Traders are 'Bulls' by nature. Because they love to see prices going up only. Stocks are bought by anybody/ corporate/ financial institutions/ Mutual Funds to make profit on rise. They have large holdings and mentally they wish and pray for the market to rise only. But facts are different. History shows that Bull Phases have shorter duration that Bear phases. So every stock that moves up will retrace back to 38%-50%-66%. Since 90% investors are Bulls by heart they normally do not book profit at higher levels to re-enter later at lower levels instead they prefer to increase their portfolio at lower levels. Successful Traders know how to capitalize such correction. They are always prepared to go 'Short' as often as they trade on 'Long' side.

Ideally you should have the plan for the whole day written on some piece of paper(in the language which you understand the best, This is actually the analysis of our daily analysis by you) and that paper should always be with you. Consult the paper everytime you feel trapped/nervous/rumors etc. Don't ever think of any other thing (CNBC(specially that smiling guy and that pretty lady that you all know- Not to be named , Guys they get lakhs for every word ),any broker report,any other person's report,don't even finance minister's.) Guys you are carrying a report of 100 experts and it has has enough for at least that day. For the next day you will get the next report. So don't worry.
SV KUMTHEKAR