9/20/2026 - Many aspiring traders focus their efforts on timing: when to buy and when to sell. They look for patterns of price, volume, volatility to establish entry and exit signals. What can be seen among the Market Wizards is an equal focus on *what* to be trading. It's interesting that many successful traders have used a version of William O'Neil's framework (CANSLIM) to focus on companies that are strong fundamentally and that are demonstrating strength in relative performance. If they are buying, they're buying the strongest companies with the best trends. They are not looking to predict when weak stocks will become strong, and they're not just trading one thing. Hedge fund manager Jim Roppel, who shares his trade ideas with other traders through his newsletter, is a good example of this approach.
What these successful traders have found is that the best performing stocks have already begun their moves. In Elliott Wave terms, they are buying the third wave of growing companies that have attracted institutional interest. It's in that third wave that a trader can ride the potentially large moves when the crowd discovers the stock. Traders in rates, currencies, and commodities focus on different fundamental qualities of best trades, but similarly wait for evidence that large institutional participants (which also behave in crowd-like ways) are finding the opportunity.
In short, the successful traders are not so much predicting market moves as identifying their early phases. This can occur at very short time frames for active day traders, as in the search for "stocks in play" described by Mike Bellafiore and playbooked by the traders at SMB Capital. First there is a screening for what is in play; only then is there a focus on how to play it.
Success at fishing is not just about using the best rod. You first need to know how to find the best ponds.
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9/18/2026 - Where traders go wrong in developing a trading career is that they first focus on trading. They are eager to succeed and make money. That short circuits the developmental process of expertise.
Consider a student who wishes to become a physician and has a passion for helping people. Where does that student begin? Not by immediately trying to treat patients (that would be damaging for everyone involved!), but by learning about the body, learning about health and illness, and learning about how to best help people with particular problems. The saying in medical school is "see one, do one, teach one". We learn by observing the work of experienced professionals, then by trying to help others with the supervision and feedback of those professionals, and then by teaching others ourselves and cementing what we've learned. And all of that is *after* we've learned anatomy, physiology, pathology, etc.
First we learn the fundamentals (the "basic sciences" of markets); then we learn by observing markets and experienced pros; then we try trading on our own with minimal risk and get feedback on our performance; then we apply what we've learned, get larger, and eventually mentor others and solidify our expertise.
All of this is what new traders do when they begin careers at hedge funds, investment banks, and other professional settings. The success rate of those programs is quite high, especially compared with the success rate of unstructured self help.
This is why team environments are generally the best way to learn trading. You can watch and learn from successful traders, and you can add your own research that benefits those traders. By studying the many books available that teach trading (see below) and teaming up with just one other learner, you can greatly improve your learning curve.
To trade the right way, it's necessary to learn the right way.
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9/17/2026 - So where do we begin if we want to build a career in trading? One of the most powerful observations that came from my review of the Market Wizards books--and books by the Wizards--is that success came from deep, prolonged immersion in markets. The Wizards spent long hours each day following markets closely--and then spent more hours reviewing performance and reviewing and previewing markets. This is training in pattern recognition, as the immersed trader sees more things more times and eventually internalizes those patterns.
What will happen when you immerse yourself in the patterns described in these sources is that you'll discover ways of thinking about markets that make unique sense to you and--most important of all--you'll pull these patterns together in ways that make unique sense to you. In other words, your trading style will be an integration of what you learn from your mentors.
A trader develops confidence, not just through positive thinking, but through cultivating his or her unique ways of viewing markets that ground their decision making.
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9/16/2026 - Right now, we have more resources to guide our trading success than ever before. Books have been written about great traders and by great traders. Yes, there is more distraction than ever before from tweets, videos, and courses from gurus. But the landscape is rich with quality mentoring from traders with proven track records. I am currently writing an updated version of my Trading Psychology 2.0 book. An important part of the update is a review of the major works of great traders over the past decade or so. Over the past month I have immersed myself in all the Market Wizards books, as well as books written by such Wizards as Linda Raschke and Mark Minervini. When I encounter an important insight, I bookmark the text. When I finish the book, I review all the bookmarked passages.
Day after day, reading the greats and about the greats, we begin to internalize their lessons. The first step in building a career in trading is surrounding yourself with trading greatness. That could be in a legit trading community, and it could be by immersing ourselves in the works of successful traders. Once we learn about their psychology and approaches to trading, we can begin to emulate their best practices. A great place to start that phase of our development is The Trader's Handbook: Winning Habits and Routines of Successful Traders by Richard Moglen, Nick Schmidt, Ross Haber, and Ameet Rai. It includes a discussion of "the trader's journey" and details steps in successful trading, from "entry tactics and trade execution" to "sell rules and position management" to "post analysis and trading rules".
Great trading begins with great mentoring. There is an amazing set of resources out there. The first challenge is to establish your curriculum and draw upon the passion and drive of the best traders to find the best within you.
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