Monday, November 11, 2013

Why Traders Fail: Mark Minervini interview

Veteran stock trader and Market Wizard, Mark Minervini speaks to Traders World magazine and offers up key insights on trading success and why most traders fail. 

First off, if you don't know Mark Minervini, you may want to check out his track record and read some of his previous interviews (he was interviewed by Jack Schwager in Stock Market Wizards) to understand his trading philosophy. You can find some good interview links included at the end of this post. 

Now if you've read some of Mark's previous interviews, you'll know that persistence plays a big part in his trading success. His latest interview opens on that note, as Mark is asked about the key traits of successful traders. 

"Larry: What are the key traits for a successful trader?

Mark: When I started 30 years ago, I knew stock trading was going to be exceptionally challenging and I knew success was not going to happen overnight. I made a decision that I was going to put as much time and effort necessary no matter how long it was going to take, because I was confident the eventual payoff would be well worth it. 

I believe one of my major strengths is my unconditional persistence. If you're someone who gets discouraged and quits easily then stock trading is going to be very difficult for you..." 

OK, but what about those who flame out as traders? We know that the vast majority of individuals who try their hand at trading fail (80% to 90% of new traders fail, according to the most frequently cited figures), but why? Minervini offers a few reasons why stock traders often fail. 

"Larry: Why is it that most traders fail in the markets?

Mark: Here are 7 common reasons:

1. Most traders follow a flawed strategy with poor selection criteria (usually based on personal opinions or bad advice).

2. Even when they find a good approach, the majority of traders don't stay the course. They suffer what we call "style drift", changing strategy when short-term results are unsatisfactory.

3. The #1 mistake made by virtually all investors is that they don't cut losses..."

Check out the full interview to see the rest of Mark's list, aka the "7 Deadly Trading Mistakes". 

You'll also find Minervini's thoughts on the benefits of a positive outlook and believing in your abilities as a trader, setting realistic trading goals, money management, and the importance of keeping good records of your trades. Plus, an overview of the methods Mark Minervini uses to trade stocks.  

Related posts

1. Mark Minervini interview: define and refine your approach.

2. SMB Capital at Indiana University: aspiring traders take note.

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