From the legendary Jesse Livermore or J.P. Morgan in the early part of the last century to Paul Tudor Jones and George Soros of our times, there are quite a list of big giants who made money from the swings in the fortunes of countries, companies or commodities.
Swings in oil prices and other commodities like gold, copper, silver, stock market indices like Dow Jones Industrial Average, FTSE 100, Dax, and individual company shares are the present favourites for traders.
Soros, who broke the Bank of England, literally, in the 1980s is also famous for his raids in East Asian economies in the late 1990’s. Jesse Livermore, who started his life in a very menial job in a stock broking firm, made a fortune trading in the stock market and commodities. So did the legendary Morgan, who acted with grit to save the U.S. financial system amidst the stock market crash of 1929.
Jack Schwager, through his books under the Wizard series, including the first ‘Market Wizards’ and the latest the ‘Hedge Fund wizards’, did a wonderful job of capturing the psychology, trading methods, risk approach, and the daily grind of successful traders-who were part of an institution or might have been running their trading business from the basement.
The fact is, trading business can be started by anyone. It doesn’t matter whether you have a swanky office or just a basement. What is more important, according to successful traders is the ability to spot opportunities and profit from it without compromising on the overall risk parameters. But, the fact that the business can be started by anyone, doesn’t presuppose that everyone will be successful in the same.
One factor is common among the successful ones: the ability to do hard work in the form of market research, development of trading method and development of risk management. Getting a mentor during the start of your career is a great blessing. Having a mentor, is counted by many of the successful entrepreneurs as a big reason for their success. It can’t be stressed enough, in a field like trading, how important such a factor might be.
Great traders, including Paul Tudor Jones speaks about their luck in getting a great mentor. Jones’ mentor was a cotton trader named Eli Tullis, whose bold style of trading, contrarian approach and calmness in the face of adverse market-moves appealed to Jones.
Usually, all successful traders agree that the stomach-wrenching losses they encountered in the early stage of their trading careers trained them to respect risk and market. This means many pitfalls amateurs traders fall into including revenge trading to recoup an early loss, over-trading for excitement, trading huge size using margin capital without considering the possibility of losing all your money and similar amateurish behaviour has no place in professional trading.
Again, this points to the necessity of getting a mentor who can help you navigate the markets without bleeding from self-inflicted wounds.
For newbie traders, getting a mentor might not be an easy task. But, there are a few ways to get a mentor.
First of all, books written by great traders like George Soros or one about Jesse Livermore by Edwin Lefèvre could be a great resource. But, you might find the subject matter a bit tough to understand. May be the book ‘How I Made $2,000,000 in the Stock Market’ by a professional dancer, Nicholas Darvas, describing his exploits in the stock market,’ could be a great start.
Also, consider reading Market Wizards by Schwager, where he interviewed many trading legends in commodities and stock market. Many of the legends featured continued their dominance in the world of trading for many years. Traders like Bruce Kovner, Ed Seykota Michael Marcus, Jim Rogers follow different approaches, including technical analysis, fundamental analysis as well as trend following. Even after following starkly different methods of market analysis, all of them made big profits almost every year.
For finding a mentor, there is an even better method than books, it is called the internet.
No, sir! We are not telling you to read or listen to any of the nonsense floating in the cyber world.
Shaw Academy offers everyone a detailed introduction to each and every aspect of trading. It will introduce you to different types of market, instruments and the right type of instruments retail traders will be comfortable. Consider the following questions:
If you are struggling to answer the above questions, it is time for some learning from a world-class mentor, free of cost! Yes, our basic course covering all the above aspects of trading is free of cost.
Now you don’t have an excuse for not learning to trade the right way. A journey to make money every year.
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