How can you improve your stock trading skills? Tony Swartz’s article Six Keys to Being Excellent at Anything, which I read yesterday, provoked this question. I linked to the story in my following THINKING TRADER piece, which will be published on Friday, and also supposed to build on it because it was such a thought-provoking piece. After all, according to Mr. Swartz, the keys can be utilized for anything.

What Are The Implications Of These Six Keys For Stock Trading?

1. Pursue your passions. I did write about how I’m completely enamored with the stock exchange. Apart from being in love is having a strong attachment to someone or something else, in this instance the stock market. Passion “fuels focus, perseverance, and persistence,” according to Swartz. I won’t talk about you, but I feel these are key characteristics of a profitable stock trader, and they all stem from a strong desire to succeed.

2. Start with the most difficult task. In pursuit of their main goal, which is to be the finest they can be even as pushing via uncomfortable situations, the best performers in either field delay immediate satisfaction. Choosing a loss target is the most difficult task for me. I am convinced that the best traders decide where they will take a loss before deciding where they will make money. It’s hard to know how much you’re ready to lose before considering the immediate gratification of increasing your bank account balance. But it must be that way. Take the loss and forego the immediate gratification of money in exchange for a long life of income.

3. Intensive practice is required. “It appears that ninety minutes is the maximum amount of time in which we can devote our full attention to any given activity.” Athletes and musicians in specific must practice diligently every day, although there are restrictions to this and the need for proper rest. So, how would that relate to traders? I trade off larger charts, like the daily/weekly, as well as one intraday chart, and this allows me to devote more time to other activities, including writing this blog. For someone else, like day traders, spending time away from the charts to recharge the batteries is just as important. I’m quite certain most of you would concur that taking a break from the charts allows us to see them more clearly when we return. Trade with zeal, but take a break. When you return, the market will be open. I’ll keep my word.

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On my way home from New York a few weeks ago I was listening to Cat Stevens “Moonshadow” on my Ipod and thinking about how simple, philosophically grounded thinking can impact a trader’s bottom line.

We tend to think that taking a loss on a trade is the end of the world when it is not.  It is just a trade that did not work out.  Period.  No need to re-invent the wheel, throw out the baby with the bath water, or cry wolf one too many times.  Maybe we should simply have the attitude of Cat.

… if I ever lost my hands
Lose my plough, lose my land
Oh, if I ever lose my hands- Oh, if…
I wont have to work no more

And if I ever lose my eyes
If my colors all run dry
And if I ever lose my eyes – Oh,
I won’t have to cry no more

And if I ever lose my legs
I won’t moan and I won’t beg
Oh if I ever lose my legs- Oh if…
I won’t have to walk no more

And if I ever lose my mouth
All my teeth, north and south
Yes, if I ever lose my mouth- Oh if…
I won’t have to talk…

Let’s add another stanza here for the stock trader…

… if I ever lose a trade
The Market takes the money I could have made
Oh, if I ever lose a trade…
I won’t have to brag no more!

Kind of puts things in their proper perspective doesn’t it?