Editor’s Note: Let’s face it. We’re all drowning in information these days. And this information overload is destroying our ability to focus on making winning trades with confidence.
That’s why our friend Nate Bear, the Lead Technical Tactician at Monument Traders Alliance, is cutting through the noise in today’s guest article.
He’s showing readers a dead-simple mental strategy that will help them avoid the most common mistakes beginner traders make. This advice alone will put you ahead of the vast majority of traders.
– Rachel Gearhart, Publisher
Have you ever watched Bob Ross paint?
It’s almost like watching a monk meditate. It’s soothing… and it makes you feel like all is right in the world.
It’s the exact opposite of what many people think of when they picture Wall Street.
They might picture a man in a suit yelling into his phone in a New York City trading pit…
Or an angsty, Ivy League-educated trust fund baby who knows all the insider info and thinks his presence is a gift to everyone around him.
These stereotypes might make for some good Hollywood movies. But the reality is…
You don’t have to be a “typical” Wall Street pit trader or insider to make winning trades in the market.
Case in point… I’ve never commuted to Manhattan to trade on Wall Street. I started my trading career while working in construction. I’d make trades on my phone in the parking lot as I waited to pick my kids up from school.
I once hit a 111% winner while sitting in front of the school in a line of minivans.
What a time to be alive, right?
This style of trading wound up generating $2.7 million in verified trading profits from a $37,000 account in just four years.
Learning to trade has been an amazing journey.
But I must say… I wasn’t an overnight success.
Like any trader who’s just starting out, I still had to hone my skills. But I was able to do it my way… without sacrificing my family-first lifestyle.
Along the way, I learned that being calm is everything when it comes to trading. Some of my Daily Profits Live members have even referred to my personality as “Bob Ross-like.”
It’s funny to hear myself described that way, since I’m far from a famous painter.
But it’s also funny because I wasn’t always this calm.
In fact, when I first started, I blew up a $15,000 account.
Yep. $15K… gone. Just like that.
I was so upset after that trade that I punched a hole in my wall.
Can you imagine Bob Ross punching his easel?!
That was the moment I knew I had to alter my approach.
I sought help from a community of experienced traders, and it made all the difference. I started trading with less emotion, and I even created my own system for finding winning trades.
Fast-forward to eight years later, and I’m still using these Bob Ross-like, serenity-inducing principles in my trading.
Here are some of my greatest trading lessons… in Bob Ross’ words.
No. 1: “If you want sad things, watch the news.”
Bob Ross once said, “We want happy paintings. Happy paintings. If you want sad things, watch the news.”
Turns out he was right about the “watch the news” part.
When I first started trading, I’d believe whatever I heard in the mainstream media. I’d get all excited when I heard people talking about the next hot stock… and I’d start to panic when they talked about the economy going under.
Later, I discovered…
This low-quality information was just a form of manipulation. After I’d made my trades on the stocks that the media had hyped up, the savvier traders would sell off, leaving me with a loss.
Ouch.
The lesson here is to never blindly trust the news when you’re making your trades.
No. 2: “It’s hard to see things when you’re too close. Take a step back and look.”
I cover this concept almost every day in Daily Profits Live.
Beginner investors have to understand…
The market doesn’t care how much you like a certain company.
The movements of the market are nothing more than reactions to a complex string of information.
How many times have you made a trade only for it to start heading south?
You’re losing money, but you tell yourself, “If I can just hang on for a little while longer, I think I’ll be able to break even.”
It’s at this moment that the warning sirens should start going off in your head.
This is when you need to “take a step back and look.”
You’re not thinking clearly, because you’re hoping the stock will do what you want… and you’re ignoring all logic and reason, which are telling you that the trade is cooked.
The takeaway? Listen to those sirens – they’re telling you it’s time to get out of the trade.
No. 3: “Anytime you learn, you gain.”
I know it sounds cliché, but all my losing trades can be traced back to not following the advice of those first two quotes.
As you continue on your trading journey, understand that you’ll probably still be susceptible to fear and greed. But the main lesson is to stay true to the fundamentals that have led to consistent winning trades over long periods of time.
And each time you take a loss (and you will take losses – no trader is perfect), it’s just another opportunity to learn and get better for next time.
The post What Bob Ross Can Teach You About Trading appeared first on Wealthy Retirement.