5 Rules to Become a "Trading Monk"
Thursday, April 10, 2008 | Jason JovineRating:
Tell me if this is you:1. You work very hard at your “day job”.
2. You can’t stand your boss and most of your co-workers.
3. Your job doesn’t pay you enough.
4. You don’t get the respect that you deserve at work.
5. You see stupid people who have more money than you do.
6. You experience road rage regularly.
7. The only vacation that you are familiar with is a working one.
8. You are uncertain about what to do to make more money.
9. You are skeptical about most things.
10. You wish that you could just “get away” sometimes (e.g. move to Alaska).
Take a deep breath and think about becoming a “trading monk”. Let me first define what a monk is:
“A man who is a member of a brotherhood living in a monastery and devoted to a discipline prescribed by his order: a Carthusian monk; a Buddhist monk.”
We should all know by now from reading The Tycoon Report what a trader is. Let’s take a look at what a potential trading monk may look like.
Of course I am just kidding around. You don’t have to get as serious as a monk to make money trading, but you do need to develop a certain mind set in order to take your trading/investing game to another level.
Things to work on:
1. Make learning about investing and trading part of your life.
It’s just like trying to lose weight; it has to be a part of your lifestyle. When you're on a diet, you may take the stairs instead of the elevator, park your car far away from work so that you have a further distance to walk, etc.
You should make learning about trading and investing a part of your life. Start slow and work your way up. Bring a book on investing with you while you’re waiting in the doctor’s office, etc.
2. “It’s the economy, stupid.”
I am actually shocked at how weak many traders and investors are when it comes to the economy. Take the time to learn economics and what the statistics mean, and you will have a competitive advantage over others in the market that are competing with you to make money. The economy will reveal to you when, where, and how to play the market.
3. Paper trade first.
Before you start to bet real money, practice paper trading first. It’s like taking practice exams before you take the real thing. Believe me: You would rather make your mistakes with fake money first.
4. Get comfortable with a handful of securities.
Find a handful of stocks and get to know them intimately (like the back of your hand). Each stock has its own unique character. Find out the “character” of a handful (e.g. five) good name companies and watch them for several weeks or months (depending on your personality) before you bet real money on them.
5. Get in there and trade.
Once you feel comfortable, get in there and trade. Just remember to crawl before you walk, and to walk before you run.
In closing...
I speak with people on a regular basis who try to invest and trade on their own, lose money because they went about it the wrong way, and eventually just throw in the towel and give up. THIS DOES NOT HAVE TO BE YOU!
To be good at anything, it takes practice, dedication, and hard work. If you don’t want to put that effort in then throw in the towel right now, hand your money over to a “professional”, and get ready to receive mediocre returns and retire when you are about 90.
The choice is yours. Do it the “right way” or don’t do it at all.
Until the next time folks...
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Jason Jovine
Contributing Editor
The Tycoon Report
