Stock trading lessons by world’s best traders

I have found that the best trading lessons and advice for any trader or and investor could be obtained by listening to the most famous traders in the world. These private traders and hedge fund managers could provide very valuable free every day trading classes and advice.

Well they do not provide trading lessons or education. If you have the chance to work with them you can learn directly from them and take their classes, but most of us do not have the chance to do it.

So how can we learn their position, swing or day trading secrets that they have? How can we transform their very stellar success to our own performance?

Best stock market advice is in interviews with these star asset managers

I have found that big gems with every-day market secrets could be found in interviews with these best traders. I have found some interviews with top asset managers on the web and also found some books with this theme. I use them as free educational classes.

What are their every-day market secrets and tips

“Hold on to your winners and cut your losers quickly”

This is very important advice provided by Michael Marcus. Most investors hold their losing positions and expect that they will return to profit. They sell their profitable positions too soon to be able to hold losers longer. This is wrong. Losing positions should be cut quickly at a determined stop loss level. And profitable investments should be held as long as possible in accordance with trading rules for trailing stops and targets.

“It is possible to make millions of dollars. If you take a position and use discipline, you can actually make it”

This idea is provided by Bruce Kovner. It is correct. It is possible to be a profitable trader. But there is a big IF. It is necessary to use discipline and follow your trading rules. These rules should be prepared in advance, before real money management has begun. They must be tested by virtual or paper trading. And finally they must be applied and used together with very strong discipline. Usage of discipline is the only the way how to make money on the stock market. Follow the rules – it is the main idea of his classes.

“You must be willing to make mistakes regularly”

Again, this every day advice is by Bruce Kovner. It is critical to understand that it is not possible to make only profitable trades. There will be profits and there will be losses. There must be rules for money management and risk reward management. These rules together with good trade management techniques then arrange that losses will be small and profits much bigger, i.e. we will be able to make money by trading.

“Why do most traders lose? They overtrade”

This is a very big truth from Mr. Gary Bielfeldt’s classes. Patience is a key in trading. It is critical to wait and enter the trade only when all advantages are on our side. When risk is minimal and possible reward maximal. When a trade could receive help from prevailing stock market trend. Every trader should spend a lot of time watching and analyzing and only a small portion of the time on the real execution of his ideas.

It is also true for daytraders who tend to trade more frequently and make several trades a day. It is normal also for a day trader to not make any trade. Another common error is that traders want to make money back immediately after losing some. Do not fight it. Forget about any position immediately when it is closed, it does not matter if it was a losing or profitable trade. All that matters is if this trade was done accordingly to a prepared plan and rules. Such checking could be done at the end of every day by way of debriefing procedure.

These tips and advice represent very valuable swing and day trading classes that must be paid for otherwise. And sometimes it is not possible to obtain these lessons, as these best money managers do not give such classes publicly.

One possibility is to find free every-day trading classes in some interviews like the ones that were published in Jack Schwager’s Market Wizards book.

Market Wizards: Interviews with Top Traders
Author: Jack D. Schwager

I recommend this book very much.