“Say this one mantra and you'll be a successful trader”

by , 04 July 2018
“Say this one mantra and you'll be a successful trader”
Q. “How do I convince myself to stay in a trade without intervening with my winning trading strategy?”

I have one trading mantra that’s helped me succeed in the trading world for the past 15 years.
When I say this mantra, it stops me from making unnecessary decisions like moving my stop loss or take profit, when I shouldn’t.
“My trading strategy rewards me for following each trade, whether it’s a winner or loser and punishes me for not following it. In the medium to long term, I know I’ll grow my portfolio.”
Q. “You often talk about the Blue Chip companies with the ALSI Top 40. What do you mean by Blue Chip companies and why don’t you look at the other 300 plus companies listed on the JSE when you trade?”
The name “Blue Chip” comes from the game of Poker.
Blue chips you’ll find, have the highest value chips when you play Poker.
Blue Chip stocks are similar.
They are the highest value, most popular, established and heavily weighted stocks on the JSE.
The main reasons why I look at the top 40 Blue Chip stocks on the JSE is because they are:
  • Less volatile where I can profit from their trends
  • Less likely to de-list, liquidate or be suspended
  • The most heavily traded stocks on the JSE which means lower costs
  • Are more stable and provide steady growth fundamentally
It’s ambitious. But it just might work…
Q. “I am planning on trading four to five hours a night for extra income. If I work hard and take many trades, will I become a successful trader?”
There is a misconception out there that the harder you work and the more trades you take, the more money you’ll make as a trader.
You can work as many hours as you like, searching through thousands of stocks and taking every trade you possibly can.
You might see this as working hard. 
I see it as over trading.
And over trading is probably one of the biggest reasons why most traders go bankrupt.
When the trading environment is favourable, you’ll make some money.
But when the environment becomes less favourable, where the market moves sideways and is volatile, you’ll find you’ll take a string of unnecessary losses.
These consecutive losses will deplete your portfolio quickly.
So instead, here’s what you should do to avoid over-trading:
  1. Choose only the Blue chip stocks of an index
    (to narrow down your trading watch list)
  2. Look for two to three high probability trading setups a week. This way you’ll control how much you can potentially lose, should your trades go against you.

You can work just one hour a day to find high profitable trades.
Always remember, “Wisdom yields Wealth” 
Timon Rossolimos,
Managing editor, Red Hot Storm Trader

“Say this one mantra and you'll be a successful trader”
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