What can average talented investors learn from above and how can mistakes listed above be avoided? The following key points can be learned from some of most successful Trader Legends:

ØEach investor has its own personality. Some of investor have a very aggressive trading style and are trading very frequently. Some prefer stocks as other are more risk oriented and invest in options. Others want only spend a minimum of effort. An investor need to reflect on his profile and choose a trading approach which fits his personality.

ØA trade needs to be completely planned in advance. People plan a lot of their activities, e.g. when they go on holiday, when they move house etc. But do they have a plan when they invest? An investor needs to have a system that helps him to be prepared for all scenarios of a trade. One needs to know in advance when to buy, how much to buy, when to exit. Once a trade is executed price of instrument (stock, option, bond etc.) cannot be influenced by normal private investor anymore.

ØThe most important component of a trading system is Money Management? Surprised? Lots of investors and traders spend most of their time developing a very sophisticated trade entry system. But entry strategy contributes only approximately 15% to success of a Trading System based on academic studies. The most important question of a Trading System is how much to invest and how many positions to trade at same time.

ØA ‘can do’ attitude is required to trade successfully. 99% of world’s population probably has this dream of being financially free, but only 5% have reached it. Why? Because with phrases like “…it would be great, but I can’t…” or “…one day perhaps I will win in lottery, but until then I must work hard…” they have already lost.

For more information and a complete Stock Trading System based on a modified Nicolas Darvas approach, see my web site shown above.

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