The Traders Journal

Insiders Know It, Professionals Have It, Novice Investors Ignore It


Question-mark2When the stock market ground below your feet begins to shift, metaphorically-speaking, and your charts turn into Jello, it will take much more than your magical methodology to save the day.   Turning pain into a beautiful trade is what marks a master investor.  So why is it that over the past decade and a half of teaching college investment classes, the end of term surveys are so predictably consistent and have been so the entire time?

Let me explain.  Novice investors come to investing with the belief that a Holy Grail methodology exists.  While some work hard to find it, other overly cerebral types believe they’ll create it.  I’m fine with that.  I can usually teach an average investor my methodologies essentials in the 7-week class.  I also try to teach them essentials pertaining to what I call “The Investor Self”.  The novices are scarcely listening at this point.  Therein lies the rub. 

The novice investors believe in the gospel of an acquisition – just give me the right tools and let me run.  The seasoned investors in the class grin knowing that the gospel of transformation is what they’ll need to truly succeed.  These students have experienced the prerequisite conversion from emotional rags to investment riches. 

From the student surveys, I can estimate with frightening accuracy just how accomplished an investor actually is.  You see, over the years it has been a consistent and predictable metamorphosis.  After the 3rd semester of classes, the lights go on and investors finally begin to embrace the gospel of personal transformation and acknowledge that they must seek out more wisdom pertaining to the Investor Self.  History assures us that the grand mystery of trading lies within the traders themselves.

Prior to that, their surveys always suggest that more time be spent on charts and less time on my investor mindset and discipline examples.  They begin to understand when seasoned investors describe the calm euphoria of a perfectly stalked equity and a really great trade.  The novice investors begin to understand the need to find equilibrium a midst the emotional kerfuffle of their own trading.  They begin to grasp and behold the reality that their methodology is basically the same as that of the seasoned investors – therefore the variations in performance are accounted for and explained by the differences in emotional control, discipline and maturity of the two investor groups.  Not so much by the tools, routines or charts.

When this realization occurs, the lights go on and inevitably the next quote is “oh, now I get it!”  When the heavy breathing and ground rumbling stops, the real trading can begin.  The adrenaline will always be there.  That’s why we trade in part, but the extremes will be modulated and controlled.  The gospel of transformation and enlightenment literally occurs at the cellular level.  I can teach you the methodology, but after that whether stock market mastery will be achieved is decided in large part by your ability or inability to transform yourself.  Shifting your attention briefly away from another trading tick here or there and carving out time amidst the busyness of a trading day to invite some introspection about your emotional status will acknowledge its importance and encourage your personal growth as an investor.  If you ignore this straightforward truth, you’ll never be an insider.

Trade well; trade with discipline!
-- Gatis Roze

Gatis Roze
About the authors: , CMT, holds an MBA from the Stanford Graduate School of Business and is a past president of the Technical Securities Analysts Association (TSAA). He is also the co-author of Tensile Trading: The 10 Essential Stages of Stock Market Mastery (Wiley, 2016). A full-time investor for over 25 years, Gatis has taught sold-out investment courses throughout the Pacific Northwest and beyond since 2000. Learn More

Grayson Roze
is the author of Trading for Dummies (Wiley, 2017) and Tensile Trading: The 10 Essential Stages of Stock Market Mastery (Wiley, 2016). He has worked in the financial services industry for since 2012, and now serves as the Business Manager for the company. He holds a Bachelor's degree from Swarthmore College. Learn More
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Trading Well = Trading with Discipline. So True. Thank you for the stealth reminder.
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