In his book “New Trader, Rich Trader” Steve Burns tells the story of a journey a “New Trader” as he is being mentored by an experienced “Rich Trader.” I found the story fascinating as it highlighted many of the pitfalls, misconceptions, and psychological traps that I myself fell into when I was a new trader. It reads like a novel and I found it difficult to put down. There are lot’s of great takeaways from New Trader’s journey. Here are a few that I took away:
Most stress in the market comes from a variety of unknown variables including but not limited to: fear of loss, uncertainty of a trend, a “need” to make money, etc… You can limit your stress as a trader by removing as many of the variables as possible and by at least knowing what the other variables are.
Knowing why you did or why you did not take action is very important. Having a trading journal where you record as much data as possible is important. A trading journal is like having a teacher who teaches traders about themselves.
Controlling risk is paramount. When a stock moves against you, hits your stop, or gaps below your stop, get out. This is your insurance against ruin. Don’t hope, don’t try to predict, just sell.
Have an accountability partner with whom you can talk about your trading.
Don’t count your wins as they come because if you lose them, it will hurt.
Rich Trader never told New Trader what to do, he tried to show him how
One affair can cost you your marriage just like one big trade with too much at risk can cost you all of your capital.
New Trader, Rich Trader is very well written, a relatively quick read, with lots of great takeaways regardless of your level of experience. At the end of the book Steve thanks both his wife and his daughter. He thanks his wife for all of her support and trust in his trading. If you’re married and just starting out in the market, spousal support is key. I know I wouldn’t be in the market at all without the endless support and trust of my wife (thanks again honey!) He also thanks his daughter who helped him write the book and is a strong trader in her own right. I think it’s great that he helped teach his daughter about the market and I personally feel that if more of us learn about the market and pass that information on to our children, we’d take a big step toward eliminating poverty.
Please buy Premium plan after click on link to support us & download fast, it’s cheap: