I consider myself a successful trader, a consideration that has been very, very hard to come by. There were years when I considered myself successful, but it was a delusion. As described in my profile, I was buying stock in the greatest bull market of all time, it had nothing to do with skill, it was dumb luck. Maybe that's why I am so hard on a guy like Jim Cramer, who couldn't trade his way out of a paper bag, but was lucky enough to be in the hedge fund business at the time of the same bull market and likens his success to skill now, wallowing in his own delusional egomania. Yea, sure Jim, you're the greatest. The greatest, "what" we will leave to your viewers, but moron comes to my mind.
Getting back to my rumination on success, I was walking through a Barnes & Noble bookstore today, the bricks and mortar kind inside a mall and filled with educated types, at least more educated then the hordes at the food court across the way. As is my want in these situations, I found my way to the financial sections, investing books in particular. A glance at the book-filled shelves and a couple of smack-in-the-face realizations immediately came over me that I want to share here. First, there was Cramer again, all over the place, his hard cover "Jim Cramer's Real Money: Sane Investing in an Insane World." Sanity is not Cramer's forte, believe me. Flipping through his book, I was taken by how little substance he can put into so many words. Case in point, his "25 Rules of Investing." Number 1, Bulls, bears make money, pigs get slaughtered." What the hell is that supposed to mean? Take quick profits, leave the home run trades for someone else? Have so little faith in your ideas that you cut out on them as soon as there is a glimmer of success?
Or how about this gem: "Beware of Wall Street Hype." Thanks Jim, didn't think of that one. Or "Cash is for winners." Again. What the hell is that suppose to mean? Who cares, let's just make it a rule. Ten minutes of skimming through this book, it appears to be little more then his usual shameless self-promotion. Who among us doesn't know he graduated from Harvard Law, started his career at Goldman Sachs, ran his own hedge fund and has lost eight pounds since some undisclosed point in the recent past? Yet who among us can name five stocks he likes right now? What's it all about Jimmy, is it just for the moment, will it end?
My other smack-in-the-face realization came from the slew of new books out on online trading, daytrading, short-term trading and making a living online stock trading with the secrets of pros. Flipping through a half dozen of these enticing titles, a few basic themes emerged. First of all, these books with such hopeful promises in their titles spend most of their time explaining the most basic terms of the trade. Entire chapters are spent explaining how to read stock tables in the newspapers, or listing the various data sources available online. Technical analysis is painstakingly described in most simplistic, yet confusing ways. Examples, all in retrospect, are set out in beautiful charts. This is the antithesis of our friend Cramer's Rule 13, "No Woulda, Coulda Shouldas.." In retrospect, we are all billionaire traders.
The title of this blog is, "On Success." So let's get to it. Forget Cramer and his like. Forget the books, as in trading maybe more then anything else, those that can do, those that can't write books with catchy titles. One of my friends and readers of this blog as asked me publicly and privately to describe my system, as though there is one magic formula that turns ordinary traders into trading gods with the click of an icon or entry on a spreadsheet. Success is a process, it's an accumulation of knowledge, of instinct gleaned from years of observation, analysis and real time real money trading. I've taught my techniques to only two other traders, one a fellow who has been collaborating with me for a dozen years, and it only seemed fair, since we both had been struggling together for so long, that I share the technique with him. The other person was a friend who I met on an Internet forum, who was going through some painful, life-altering personal problems at home and she suddenly found herself on her own to make a living yet still have time for her children. Trading allows for that sort of freedom and I wanted her to have a fighting chance. Both these traders continue to trade the technique as their sole source of income and have both helped me fine tune what I already have and have inspired me to expand it's capabilities.
But there is nothing magic about what we are doing. It is the result of years of hard work and dedication, focus, perservance and determination. That my readers, is the secret of success, hard work, dedication, focus, perserverance and determination. It comes from within, it is free and it is unique to each one of us. You don't need a moron like Cramer, or a get rich quick promotion from a book, or google click-through ad. Success is an elusive mistress, but not beyond your own capabilities and reach, unless you make it so.
And if you have read this far, here is your reward: Take a 3 period CCI and place under a daily or even hourly chart of any stock or index of your choosing. See if you have it in you to make money off of what you see.