NEW TRADER, RICH TRADER REVIEW
Category → How to
It goes without saying, at one time or another, we were all new traders searching for the secrets to becoming rich in the stock market. Of course, the path from new to rich is at one and the same time the same and different for each of us. The path is the same because the reasons for failure are common, behavioral based issues that we all face; different in how quickly we recognize and manage the issues. In New Trader, Rich Trader, Steve Burns shares the story of a New Trader and the lessons he learned while working with a mentor, the Rich Trader. There is no stone unturned here as the New Trader faces all the challenges we have or will face the longer we tackle the market. Fortunately, New Trader had his mentor. Rich Trader has â€śbeen there done thatâ€ť and now in a position to help another. Burns divides his book into three sections: Psychology, Risk, and Methodology. The order, I believe, is appropriate and intentional. Without the proper mind set and a firm grasp of risk any methodology will fail. PSYCHOLOGY The issues faced by the New Trader are greed, stress, impatience, fear, and lack of desire to learn. â€śWhen a new trader enters the stock market with money but no experience, the odds are he will quickly gain experience by losing money.â€ť RISK The New Trader must make managing money a priority, run trading like a business, control trading size, admit when he is wrong, and lock in strategy driven profits. â€śWhen you go to your computer to trade, you should approach it as if you are entering an auction, not a casino.â€ť METHODOLOGY The New Trader develops a methodology based on perseverance, sticking with a winning system that loses from time to time, probabilities, following the marketâ€™s lead, having an exit plan, and letting winners run while cutting lose the losers. â€śDisciplined traders can make money trading any system with an edge, but traders without discipline cannot make money trading any system because they cannot follow it.â€ť I recommend New Trader, Rich Trader as a great primer for new traders. It reminds me a lot of The Golfer and a Millionaire, one of my favorite books. Read New Trader, Rich Trader then move on to Mark Douglasâ€™ classics The Disciplined Trader and Trading in the Zone. Experienced traders? Read New Trader, Rich Trader for no other reason than to ignite a passion to better mentor or begin mentoring others. You might find, as I have, that your trading will improve, making for an even richer experience.