In pulling back the curtain on the stock market basics, this is the second article in the series of why traders fail.
To many mediocre and unsuccessful traders, lack of control over research may sound like a strange point to pick as one which can lead to poor trading results. However, every exceptional and successful trader I know would say methodical stock market research is a corner stone of their success.
Let’s look at the 2 opposing positions. Many traders who do “OK” trade on news, tips, ideas that come across their desk or over the newswire, or some other haphazard method for finding trades. A key characteristic of their trading is that it is reactive.
The exceptional trader doesn’t take such risks…he is proactive. He is purposefully and methodically trawling the markets looking for opportunities. His research is regular, wide and eventually deep. His missed opportunities are few and far between and the quality of his average trades far surpasses the average trades of reactive traders. This is simply because he has a greater catchment area in which to find trades…probability works on his side because a methodical and repeated process throws up many sterling opportunities regularly.
So, to try to ensure repeated or higher success in the markets, try and do your research methodically. I outline a fool proof method for doing this type of research in my stock market course. If you aren’t researching methodically and are a reactive trader, you are without question leaving money on the table over a long enough time horizon…and this could come back to bite you….hard.
Why risk it? As Nike says….Just Do It! (right from now on).
