So today after the radio show I spoke with the host Jason about trading & real estate and it hit me that most people tend to do too much. Whether it's trading or anything else in their lives we tend to chase far too much at one time.
With the world of investing chasing 5 rabbits (five trades/strategies) and not focusing on one usually causes losses. It's amazing to me being on this side (educational) of the business the last three years of the stories I hear from students. "It's taken me 6 years to be profitable" or "I've been doing this for 6 years and still cannot get it". Why? Is it because of the strategy or lack of focus? Sure this is a hard hitting question but I've been on a kick of perspective after reading Dalios latest book, Principles (read it if you have yet to).
When people say that you can usually boil it down to one thing: They never focus on learning how to be great at one market or one strategy. They jump from indicator to indicator or research some new strategy instead of just actually sitting at the screen and doing what? Trading. When I first started in this business I worked as a trader for a private shop. My duties were simple: I traded E-Mini, Russell and Crude. That's it. I never cared about what Blackberry was doing with partnerships or what the fed was doing with their balance sheet or whether or not the TTMSDS Squeeze was saying. I traded price.
The charts are what matters. Period. Price on the chart is very direct, it tells you where the market is headed, or in the case of oil up until today, not headed (sideways). I have a few friends still that trade institutionally, one for Millenium Management. All he trades is WTI Crude for his desk, that's it. Day in and day out, crude oil, crude oil and you guessed it crude oil. Retail traders, for whatever reason, chase too much and tend to rarely focus on one thing.
I'll pose this question to you: What does it matter what earnings are for Apple if the price chart tells you what to do? The answer is that it doesn't. It's one thing to want to learn to be knowledgeable but it's another thing to sit down and ask yourself one thing: Are you in this to make money or are you in this to know it all?
I hope this helps.