To become an expert at anything requires practice, and I reckon that includes stock trading and investing. But maybe it’s possible to shorten the learning journey by tuning into those who have already achieved what we want to do.
If taking advice from anyone, let’s make sure it’s from someone who has walked the walk and can demonstrate success in the field we aim to master. In the sphere of investing and trading, one popular stock-trading legend is active in the markets right now and broadcasting loud and clear, his name is Mark Minervini and his teachings seem to be gaining traction with many UK-based investors and stock traders.
Investing wizardry
In a trading career spanning 34 years – and counting – US-based Mark Minervini grew his personal trading account from “a few thousand dollars” into a multi-million-dollar fortune to become one of America’s most successful stock traders. He talks about returning 34,000% over one five-year period, which is just amazing. A record like that is enough to make me sit up and listen to what he has to say and there are a number of ways to do that.
I’d recommend getting hold of a copy of his self-penned book called Trade Like a Stock Market Wizard: How to Achieve Superperformance in Stocks in Any Market. The book stands out from the pile of investment books in my library because of the depth of detailed fundamental and technical explanation about how he goes about selecting, buying, managing and selling his stocks. I have yet to read a book that takes me through the process so thoroughly.
The magic continues
This year, he published a second work called Think & Trade Like a Champion: The Secrets, Rules & Blunt Truths of a Stock Market Wizard. It’s available in America and is yet to be released in this country, but I’ll be getting hold of a copy soon. Meanwhile, Minervini writes an occasional blog that’s well worth reading and drops pearls of well-earned wisdom into his twitter feed on an almost daily basis. If I had to sum up his approach to investing and trading I’d say it’s all about:
- picking the right stocks in the first place,
- timing an entry into the trade with a level of precision that I’ve never come across before,
- knowing when to run winners and when to cut losers
- and improving overall performance by managing risk.
In a flavour of the issues addressed by Mark Minervini’s methods, he sets out in a recent blog post why he thinks most traders fail to achieve big performance:
1. Poor selection criteria
2. Incorrectly managed risk/reward relationship
3. Adding to losing positions (averaging down)
4. Failing to nail down decent profits
5. Letting decent gains turn into losses
6. Over-trading
7. Under-trading
8. Not knowing the truth about your trading (lack of post-analysis)
9. Style drift (not committing to a single strategy)
10. Unrealistic objectives and lack of patience
11. Trading too large
12. Overly diversified
13. Lack of discipline (not following your own rules)
It was another guru, Richard Farleigh, who said “investment and trading are increasingly similar,” and I think tuning in to Mark Minervini today could be well worth your time and is likely to help improve your investing performance.