We have all heard those wisely spoken words of advice – if you want to be successful at something, be sure to take heed of the advice and actions of those that have already proven themselves in your desired area of expertise.
This makes a lot of sense. Many Safety in the Market students have taken that same step when looking to David Bowden to show them the path to trading success. A path that has been successful not only for David, but for many of David’s students worldwide.
In this article I wanted to share with you a list of characteristics that, when blended together, can form the foundation for successful trading. The following list is a collection of points taken from the interviews contained in the Market Wizards book by author Jack Schwager, and certainly worthy of further discussion.
Let’s begin…
Everyone has a Method
As we touched on earlier, David has laid down the foundations of a successful path for you to follow. Your job is to take the rules and make them your own. Before you start to trade, understand that there is no Holy Grail. Too many will divert from the path they began on, in search of an ‘easier option’ and end up as what you might call a ‘Jack of all trades and master of none’. More often than not, this doesn’t quite cut it in the markets.
Discipline is the Key
When trading there is no boss and no rules. You can place any trade on any market (as long as you have the capital), even if the trade doesn’t quite fit the rules. At the end of the day, you can’t get yourself fired, and on the odd occasion you might just make some money. See that’s the catch though – when trading, you can even be rewarded for breaking the rules. Understanding your rules and really knowing when and when not to trade will hold you in good stead. You must have discipline and set good habits.
Desire and Drive
You need to do more than just ‘wish’ to be a successful trader. You will need nothing less than a core desire for success to carry you through those challenging periods, and to give you the courage to make sacrifices. To start to generate higher levels of desire, think deeply about the reason you wanted to get into trading, and more importantly what you can take out of trading once you are successful. More time with the family, an overseas holiday, lower the golf handicap – only you will know your answer! Just remember, obstacles are what you see when you lose sight of your goal!
Confidence
Back testing and paper trading goes a long way towards giving you confidence in your approach. There is a big difference between knowing something because you have been told it is true and knowing it is true for yourself. Believe in yourself and make David’s material your own blend. An attitude of confident expectation is an excellent psychological asset.
Hard Work and Study
Now if you have stopped reading at this point, you may need to give us a call! You’ve probably heard this saying from your parents during your childhood, “you won’t get anywhere in life without a little hard work and elbow grease”. David also had an excellent expression – “If I have done well in my trading and study it is because I have done ordinary things, extraordinarily well.” Both a little humbling, but there’s a well-grounded message there for all of us.
Risk Control
(Always put stops on, never risk more than 10%) – Placing stops as a part of your trading routine should already be second nature. Stops will keep you safely within your money management rules and give you greater peace of mind. Being in the market the wrong way, without a stop in place, is something you wouldn’t want to wish on even your worst enemy. Remember the importance of discipline.
Patience (wait for a setup)
Know your rules inside and out. Understand what constitutes a trade according to your rules and what does not. Mental rehearsal can help tremendously when entering the market. A setup or trading decision might be reached by considering several days or weeks of market action for you to arrive at your decision to go long or short. An excellent analogy is that a chart will only tell you what you are ready to understand – you never stop learning.
Independence
Part of the challenge of trading is working alone. To learn to live and die by your own decisions and being able to take full responsibility for your own outcomes is a genuine strength. By working as a group or in a team you might actually allow yourself to place the responsibility for successful trading in the hands of others.
Understand Losing is Part of the Game
If taking a losing trade feels like the end of the world and taking a profit makes you feel like Superman, you’re in need of a happy medium. With good risk and reward management and thorough back testing, you can learn to roll with the punches. Each trade is only one of the many that you plan to take in your trading career. Be careful not to make each trade mean too much.
They All Love What They are Doing
You can see how much trading means to David Bowden in his eyes and you can hear it in his voice. Trading can provide you with a lifestyle many only dream of. Another of David’s favourite sayings is “One of the greatest pleasures in life is doing what other people say is impossible”. Achieving success in trading will be one of your most rewarding pursuits in terms of both financial success and personal satisfaction. To begin to experience the harmony in the markets that both Gann and David share in their teaching may just change your life forever.
Successful trading – now that’s a goal shared by many! It’s your job to be the one who achieves their dream. Take these steps with you on your trading adventures and reap the benefits.
Happy Trading
Purchase your copy of Market Wizards by Jack D Schwager through Amazon today.