A Successful Trading Philosophy

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Whether you are trading the stock market, futures market, or any other trading venue, a trading philosophy is important because it will dictate how you make trading decisions. A poor philosophy will inevitably lead to bad long-term results. A good trading philosophy will most likely lead to excellent results, if you combine it with discipline and patience.
 
The definition of philosophy, is the love of, or the search for, wisdom or knowledge. It also means the general principles or laws of a field of knowledge. That being said, I will share with you some of my philosophical thoughts on trading, and general principles that need to be followed for success in the world of trading.

Trading is one of the most difficult endeavors you can attempt, but there are great riches for those who become elite.  Not only do you need a successful philosophy, strategy and principles, you also need to understand the proper psychology of trading. This usually means going against normal human nature. It is the psychological part of trading that separates the fairly good trader from an elite trader. It takes many years of proper trading education to be successful in the long run.
 
When I first started trading. I, like everyone else, did not do well my first few years. I thought it was going to be easy. I could just read a book or two, buy some secret indicator or strategy, and just like that, I would be a great trader. I also tried a few advisory services. I still was not a successful trader. My problem was, I had no foundation of actual trading knowledge, and I certainly did not understand the psychological part of trading.
 
In the early 1990’s, I finally figured out I needed a successful trading philosophy, to build my foundation of trading knowledge around. I studied many of the world’s best traders. This included William J. O’Neil, Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, Richard Dennis, W.D. Gann, Jack Dreyfus, Amos Hostetter, and others. I found out they all traded with the trend. They were for the most part, trend followers. I based my trading philosophy on the same premise as many of the world’s best traders.
 
My trading philosophy is that markets from time to time make large moves. The big money is made trading these large moves. I learned this from studying the price and volume action of the stock market, and the commodities market. I trade with the trend. The strategies I implement are my specific rules I follow when trading. They flow logically from my trading philosophy, which is to trade with the trend. I have traded successfully for a long time, but it did take a lot of time and effort to become a successful trader.

Gary E Kerkow PhotoAbout Author
Hi, I’m Gary E Kerkow, founder of Tradingmarkets4u.com. This site provides information to help traders and investors become successful. I have over 20 years of trading experience including stocks, futures and options. I implement the strategies, methods, and psychology of the world’s best traders and investors. This includes Jesse Livermore, William J O’Neil and others. Visit my website at http://www.tradingmarkets4u.com

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