Big money is made by being on the correct side of a major market move and executing a carefully pre-planned scenario with conviction. I'll share an example. When I was an MBA student in 1979, Robert Swanson, the founder of Genentech, spoke to my class about an industry that did not yet exist: biotech. It completely captured my imagination and I followed it with interest, writing down my thoughts and the beginnings of a trading scenario in my journal. My rule of thumb has always been the same: if it's worth trading, it's worth writing it down. Eventually, I added the nascent biotech industry to my “Investment Radar” folder.
Continue reading "The Triumph of Catching a Big Move" »
Most individual investors seem to feel it isn't cool to talk about exits before even buying an equity. Institutional traders know that it's uncool not to do so. Who is right? As is my norm, I’ve looked to my Trading Journal to answer that question, and the the winner is...
Continue reading "Talk to Your EGO Before You Trade!" »
(Welcome to the debut article of our new blog area called "The Traders Journal" written by our new Educational Evangelist, Gatis Roze. Gatis has been trading his own account successfully for over 20 years and teaching sold-out investment classes in the Seattle area for over 10 years. Gatis' approach to trading relies heavily on maintaining a personal Trading Journal where he records all of his results and lessons learned. Via weekly articles in this blog, Gatis will share those important lessons and the stories behind them with the hope that thay will help you become a better investor. Enjoy! - Chip)
I doubled my money on the very first stock trade I ever made. With luck, this is something that everyone should do at least once in a lifetime. I was just sixteen and I took the recommendation of a family friend to allocate a disproportionate percentage of my then net worth to one single trade. I had no trading plan and no investment methodology, yet the market offered up a 100% return. At that point, I was certain God had blessed me with special powers. In hindsight, it was nothing more than a "bait and switch" pulled off by the markets. By fooling me into thinking I was a great investor, the market provided me with the worst possible outcome: wholly unwarranted self-confidence. Many decades later, I’ve managed to profitably turn this ‘teen trading’ episode inside out.
Continue reading "Double Your Money - Buy on Rumors" »