The Traders Journal

The Essential Investor's Formula for the New Year: Psych, Prep, Perspire, Persevere, Persist


ImagesEach year at this time, I become a trader of “change”.  I take certain steps to tackle challenges I’ve encountered throughout the year and endeavor to refashion and update both myself and my trading plan.  Above my desk sits a guiding quote by Dr. John Norcross:

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With investors and traders, I’d add a sixth “P” for Patience that seems to be in particularly short supply within the stock market arena.


A recent study in the Wall Street Journal showed that 46% of individual investors pledge New Year’s resolutions.  Their objectives are much like other resolvers who are trying to either stop smoking, lose weight or quit alcohol.  They want to change their habits and form new habits that will last.  But how does one increase one’s probabilities of success?  I propose that you embrace the lessons of “successful resolvers”.  There are many books on the subject and I’m certain that if you survey your successful friends, you’ll discover a number of closet resolvers. 

My belief is there are far too many myths out there about personal change that in truth are simply excuses for failing to follow through on one or more of the P’s that I presented earlier.  I’ve been writing New Year’s resolutions for myself for over 30 years.  Here’s the 6-step approach that I’d recommend for most investors.

  1. Keep a journal.  Chronicle your real life investing experiences over the past year.
  2. Do an honest Self-Assessment.  Convince yourself that you’re ready for change and that you want to change.  Be brutally frank with yourself about these necessary changes.
  3. Make a list.  Clarify your goals.  Announce your goals and discuss them in detail with a trading buddy.  Going public so to speak adds a powerful element of accountability.
  4. Draw up a 2-month timeline action plan with achievable benchmarks and small rewards along the way.  Review your progress every week.  Don’t forget to reward yourself.
  5. Do reality checks.  Accept the struggle.  Accept occasional setbacks.  When necessary, add a week or two to your implementation timeline, but build a daily productive habit of change.
  6. Monitor your achievements.  Celebrate your persistence.  Take your trading buddy out for a beer.  Follow-up with regular monthly reinforcement celebrations.

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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