If you have ever had a Big Mac (and is there anyone who hasn’t had a Big Mac?), you know that what sets it apart from other fast food hamburgers is something called Special Sauce. Surrounded by controversy, people have been trying to figure out exactly what was in this magical sauce for decades.
As it turns out, it is pretty much just thousand island dressing. Kind of a let down, I know. But Micky D’s did an amazing job of promoting their burger and making it seem truly special.
The stock market is the same way. There is no special sauce. There is no magical formula that is going to make you rich overnight or solve all your trading problems. If you want to be a successful trader, you need to focus on these simple truths.
- There are no magical entries or exits. Trading is a pre-defined process of trading with a winning system that gives you an edge.
- You have to trade with a plan. Flying by the seat of your pants is a recipe for disaster. Plan, plan, and plan some more.
- Take your losses when it’s time, and maximize your wins to the best of your ability.
- Do the homework and implement what you have learned, consistently with conviction and focus.
- There is no easy money. Accept the fact that you will have to earn it, and work hard to do it.
Many people play the stock market like they are trying to win the lottery. They just go with their gut, risk it all, and hope for the best. Take control of your future as a trader and realize that there is no quick fix. You have to do the work if you want to win, but if you work hard to research and develop a winning system and trade it with a plan, there is unlimited potential.
“Difference between great traders and the rest isn’t magic entry points, instead they’re better risk managers and better at position management.” – Richard Weissman