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LEARN FROM MARKET WIZARDS – PART 5
“Illusions are something very pleasant; but the only disadvantage is that they tend to burst like a bubble.” – Wolfgang Kurz
Deron Wagner didn’t know anything about stock markets before 1997. He read about an article that mentioned the performance of Excite.com stock – something that kindled his interest in trading. He wasn’t aware of how long it’d take him to become a successful trader. When he went into trading, he began to lose (because of some traits that are common in novices). He lost continually for some years; until he came across trading principles that work for him. He’s stopped losing since then. This means that he makes more money than he loses.
Deron established Morpheus Trading Group (MTG) in 2002. He’s a trading expert and author (having written some best-selling trading books). He, with his colleagues, has been managing money for others with their time-tested trading methods. He’s a proven track record. He’s been a constant participant at many trading/investing events across the globe. He’s been featured on many famous financial media. He was also interviewed in TRADERS’ (August 2012). He’s down-to-earth in his market analyses and trading discourses. More than 4000 interested people have been benefiting from his newsletters, sent totally free of charge. His official website is www.morpheustrading.com.
Lesson
There are numerous valuable lessons one can learn from Deron Wagner. Some of them are explained below:
A). No matter how good you think you’re in the knowledge of the financial markets, your perception would change when your hard-earned money is at stake. No matter how much you’ve read about trading, you’ll realize that theory is different from practice when the market shows you its true color.
B). If you lose in the markets, don’t despair. It means you’re only paying tuition fees to the markets. Eventually, you’ll stop losing more than you gain and become a great trader and harvest profits from the markets on annual basis. It may take some time and perseverance to achieve this. Just make sure you learn from your mistakes and never repeat them.
C). The best strategies are trend-following strategies. One of the best trading methods is to buy pullbacks in an uptrend or sell rallies in a downtrend. Some indicators can be used to attain this aim (like moving averages). It pays to go with the overall trend. When a trend changes, it must be confirmed before one starts going with it.
D). It is very dangerous to trade without stop loss or to refuse to go out of the market that’s going against you. There are no other ways protect your account as a private trader. This is a way to deal with the permanent uncertainty in the markets. You mayn’t make profits sometimes, but you can make your losses to be as small as possible. By taking risk management serious, you’ll never lose a huge percentage of your portfolio. When you specialize on not losing, you’ll eventually make money and go ahead in the markets.
Review
Trading success has to do with the time you earmark for speculative activities, not the time you earmark for systems optimization and analytical investigation. Every soul on earth has 1440 minutes per day allocated to her/him. However, only heavens know how much of your time you spend on trading on daily basis. There are many activities in which you engage yourself on daily basis; plus the time you spend with your loved ones. It seems there’s no enough time for these activities. Trading remains a serious area of human endeavor and you need to take it as such if you want to be victorious and you’d have to see how you can balance your trading career with other things that matter in your life. How do other adverse experiences in life affect your trading career? If you can’t make money as a part-time market speculator, you’d find it difficult to do so even if you go full-time. Trading full-time doesn’t remove the challenges you face when trading part-time. Spending more time on your screen doesn’t make you a better trader.
This article is concluded with some quotes from Deron Wagner:
1. “Unfortunately, I think many traders cannot learn to separate their egos from their trading decisions until they have experienced enough pain to realize that intelligence has little to do with profitability in this business.”
2. “I once read, and now truly believe, that the most successful traders are out of the markets more than they are in the markets. 80 per cent of a professional trader’s profits are made from 20 per cent of their winning trades. The “80/20 rule” is known as Pareto’s Principle, and it definitely is true for our historical performance. Therefore, if odds are good that it will be challenging to find a few winning trades that will constitute that 20 per cent of winning trades, it is best to stay on the sidelines and wait for better opportunities to develop.”
3. “Poker is luck in the short term, but skill in the long term. It is also a battle of psychological wits, much like the stock market. Proper risk management techniques and discipline is also crucial in poker, just like trading.”
Hello Azeez,
Thanks for the nice article you wrote about me. It’s a good summary of thing I have learned over the years. Nice photo too!
Regards,
Deron
http://www.morpheustrading.com
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