Over the past year, I have been speaking with my friends about my stock trading system and how it is working so well. I have been met with two types of responses. The first, the just quote the refrain they heard from someone else, "No one can beat the stock market". This is a convenient thought that makes otherwise intelligent people not even bother with trying to beat the system. I believe the reason for this is that our culture is rife with stories about mathematical geniuses who have spent years trying to predict the stock market to no avail. This is an interesting concept which could lead me to go on about (pardon the clichéd term) "conspiracy theories" for a while, but that is not the concern of this post.
The type of response I would like to speak to is the second type. These are the people that are skeptical of the phrase "stock trading system". I imagine it is because these people (as well as myself) have come across countless infomercials and web ads that promise a way for you to beat the stock market. This got me thinking. Why exactly is it that people don't trust these ads? Is it the colorful balloons on the web ad, or the creepy bearded fellow on the infomercials? It could be. It could be a number of things, but this is the best ones I have come up with.
A stock trading system/plan/technique etc. cannot be sold to many people, as the system will point them all to the same stocks, thus disrupting the patterns of the stock itself. If everyone is trying to execute a strategy that was developed for a small volume, it will NOT work.
So how can one stand on the shoulders of giants, so to speak, in order to achieve stock market success? I am once again reminded of my favorite RW Emerson quote:
As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.
All the stock trading systems… hold on, let me expand that. As for 99% of the systems out there including but not limited to, Start your own home business! (e.g. "With all the money I made from working at home, I bought a new home!"), Make a fortune in real estate!, Make a fortune on Ebay!, Make a fortune on _____!, they are all trying to sell you methods when what you need are principles upon which to build your own creative fundamental methods. I imagine that you see few infomercials for principles because they require someone to think, and when making a buck is the top priority, you don't want to single out your idiot/naïve customers (who are, by virtue of being idiots/naïve, more likely to part with their money).
In any case, if you aren't already, be wary of any system that offers you ridiculous rewards for without ridiculous work (physical or mental… more of one means less of the other). If you want to make money in any endeavor, learn the principles of the trade, then be creative to develop your own methods.
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