Let’s make a bet.
Take two new traders. The first trader, Jim, has access to sophisticated trading software and multiple news sources to inform all of his trading decisions. Jill, our second trader, is testing her own strategy, free of others’ opinions, using a simple charting system provided by her broker, for free.
Who do you think will make more money over time? My bet is on Jill, all the way.
Too Much of a Bad Thing
In “The Art of Thinking Clearly”, Rolf Dobelli describes compelling evidence that too much information at our disposal leads to poor decisions. It often impedes a decision altogether. And if that isn’t enough, “the more choices you have, the more unsure and therefore dissatisfied you are afterward.”
We see this in trading, too. You’re about to click ‘buy’ on a trade that meets every criteria on your “buy-this-now” checklist, but you sit frozen, immobilized by too much information; a reputable analyst just downgraded it, the last quarter sales number is weak, or — my favorite — I just don’t feel good about this one.
Then the stock moves up 10%.
Stop kidding yourself. You’re making this way too hard.
In “The CEO Next Door,” Doug Peterson, CEO of McGraw Hill Financial, notes that “Successful CEOs [are] willing to make decisions with only eighty percent of the information.” In other words, if we can understand the gist of something, and stick to a plan, we generally pull through okay.
Traders who are successful can box in uncertainty, distill market information quickly, screen out the noise, and pull the trigger quickly. It doesn’t happen overnight. It takes having a mentor, and using a strategy that works more days than not.
TraderLion Top 10
So let’s simplify your trading life. Right here. Right now.
One of our founders, Ross Haber, created a solution from when he was a billion-dollar hedge fund manager to cut through all the noise and translate market information into actionable trades. The guide, called the TraderLion Top 10, is distributed twice weekly, and provides a clear overview of market conditions and actionable trades from ten quality stocks.
The Top 10 Includes:
Market Analysis: What is the general market doing? Should I even be trading right now?
Top 10 Stocks: What are 10 leading stocks now? When should I buy and sell them?
Pro Tips: Quick, time-tested tips to improve your trading edge
Latest Blog: Learn the psychology behind successful trading, and strategies for minimizing losses
Below is an excerpt from the September 21, 2018 report.
The Market Analysis and Summary provides an overview of general market conditions with practical guidance to help you decide whether initiating long or short positions are in your best interest, and help you gauge your level of exposure.
The report also provides annotated charts on ten leading stocks, which are pre-selected by Ross and based on rigorous fundamental (CANSLIM) criteria and technical action. The charts are real-time, easy to read, and very actionable.
For example, Stitch Fix (SFIX) was recommended as a Top 10 stock on July 2, 2018. An entry was suggested at $30.00 with a stop loss at $28.00. Just three trading days later, the stock hit the $30.00 entry and subsequently ran to $52.44 by September 18, 2018 — a 74.8% move.
The combination of rigorous selection, pre-defined entries, and appropriate stop losses to control risk, increase the probability for trade success. Commentary is also provided by Ross in chat to guide your psychology and help prevent typical trading mistakes. As you take open more trades, your portfolio of stocks will begin to build out, as shown below.Traders who are successful can box in uncertainty, distill market information quickly, screen out the noise, and pull the trigger quickly. Click To Tweet
Becoming a successful trader doesn’t require more technology, more opinions or even more confidence. The confidence you desire comes after you can implement a strategy and see it working more days than not. That part just takes the right mentor and some time.
I always smile when a newer trader says, “I’m overthinking this trade.” I know they’re about one step away from making a killing. Good luck guys.