Since it always seems as though time is a premium, I very rarely read Financial books from beginning to end. I jump around based on interest. As I began planning my attack for “The StockTwits Edge,” I browsed the table of contents. Chapter 1 is “Find Trends, Ride Them and Get Off” by Howard Lindzon. According to Howard, it’s the best chapter in the book – so that may be a good place to start. However, Chapter 2 sounds interesting – “Trade, Trend, Tail” by Keith McCullough. Keith is a smart dude. I see him on TV a lot. Next up is “Don’t Quit” by Michael K. Dawson, @TrendRida. No need to go any farther; I will start there.
Last August I had lunch with Phil Pearlman and Justin Paterno, of StockTwits, while they were in Boston for meetings. Interestingly, 5 years ago our paths would NEVER have crossed. I was a high tech salesman – selling software to the likes of IBM and Intel, while Phil was behavioral strategies wizard at a hedge fund. StockTwits, a social media site for traders and investors, brought us together. At the end of our lunch, Phil asked me to write a chapter for their upcoming book. Without hesitation, I said yes.
As I discuss in my chapter, I began trading in the mid-90s. While the market marched straight up, it appeared as though I was a genius. However, in March of 2000 I learned the meaning of the phrase “do not confuse a bull market with genius.” Over the next nine months my genius label disappeared, as I watched my account go up in smoke.
At the time, I had never even met anyone that worked on Wall Street. Most of us outside the financial meccas of New York and Chicago learned everything we knew about trading from books. Unfortunately, most of those books focused on buying – while very few discussed selling and even fewer shared money management strategies. Although, I haven’t read all of the chapters in The StockTwits Edge yet – I can guarantee you that you will be bombarded with selling and risk management strategies. I believe that we all collectively agree that there is nothing more important.
In the book, you will learn that there are many different ways to skin a cat. There are numerous successful strategies and approaches to the market. I describe my strategy that works for me and it may not work for you. However, I hope that I have shared a message that transcends trading styles. I conclude with a quote from Donald Trump. I realized that there would be some baggage attached to Trump’s name and his Presidential attempt has added even more. Regardless of what you think of him this quote sums up my philosophy in the markets and in life – “Never ever give up. Never quit. You can never be successful if you give up.”
Trading is an easy game to get into, but it is a very hard one to succeed in. It seems as though losing a large sum of money at some point – is almost a rites of passage in this business. Trust me after losing more money in 2000 than I believed that I would ever have – my confidence was shaken. It would take almost 2 years to start trading seriously again. Many never tried again. However, it was my persistence combined with a understanding of risk management that allowed me to quit my high paying corporate job and reap the rewards that trading provides – freedom, independence and the Green.
The StockTwits Edge is an absolute must read!
The StockTwits Edge may be destined for the best sellers list, but StockTwits, the community, is destined for far greater accolades. The ability to communicate and share ideas, in real-time, with so many market experts has never existed before. This significantly shortens the path to success. That’s extremely valuable and will be realized in time.