Good traders are innovators. They find better ways to do things. They are creative. They view the same setup or market situation differently and design strategies to extract profit.
Creativity is required to reduce drawdowns or to judiciously use margin to enhance returns. Creativity is also involved in designing entry or exit strategies. If you study successful traders, they have innovated in these areas. They do not follow the most commonly discussed techniques, indicators, or setups the way the vast majority do mindlessly.
There is too much talk in trading communities about discipline and psychology, but not enough focus on creativity.
If you are not creative and innovative as a trader, it is unlikely you will last much longer, even if you focus a lot on discipline or psychology.
Good traders look for good ideas. They are constantly innovating on setups, entry, exit, risk, and other parameters. They always have new and fresh ideas. They hunt for new ideas and try to incorporate them in their trading.
If you want to improve your trading, start generating and collecting new ideas. Fresh ideas will give you a fresh perspective and fresh ways to make money.
This is why every day I start my day with these tools
Over the years, my trading has shifted a lot.
I used to obsess over perfect entries; if it wasn’t the best, it felt like a bad trade. Now, the focus is much higher level, understanding the market cycle, positioning in leading names, and finding good R:R areas, both stock and market-wise, while managing overall exposure.
This game isn’t about precision entries. It’s about getting exposure when conditions are in your favor, and managing it well.
Don’t overthink the entry, overthink when to press, be patient, and when not to.
Charlie Munger on how to succeed:
“It’s so simple: you spend less than you earn. Invest shrewdly. Avoid toxic people and toxic activities. Try to keep learning all your life. And do a lot of deferred gratification. If you do all those things, you are almost certain to succeed. And if you don’t, you’ll need a lot of luck. And you don’t want to need a lot of luck. You want to go into a game where you’re very likely to win without having any unusual luck.”
🚨For new traders. The current market environment will teach you way more than a trending up market can. It’ll reap great dividends in your trading future.
I posted this last year. I'm posting it again as a (hopefully) helpful reminder.
Growth Stock Trader Resolutions
1) Focus on the best stocks
2) Take profits into strength
3) Stop living in fear, avoid FOMO
4) Accept when you're wrong and take losses
5) Stop stressing over every tick
6) Reduce emotions, stop being a little bitch
7) Stop listening to others
8) Less social media, less news
9) Less complaining, more gratitude
10) Focus on slow, steady, and consistent progress
Druckenmiller basically admitted what most investors won’t:
You don’t need to be early.
You just need to recognize the wave… and size up when the world changes.
The real money in trading is made when a trend is young. When a stock is just coming out of a big base and starts moving up for the first time, that is where the strongest and cleanest moves happen. The stock is fresh. The buyers are just getting active. The energy is building.
This is the stage where smart traders enter quietly. There is no noise. No hype. No excitement. Most people are still doubting the move or waiting for confirmation. But the early trend is where you get the best risk to reward and the smoothest swings.
As the trend gets older, the story changes. Now everyone can see it. The stock has already gone up a lot. Every breakout becomes choppier. Every pullback gets deeper. More people enter late and the move starts to lose strength. You can still make money here, but the easy part is over.
Your goal is simple. Learn to spot trends when they are young. Look for a stock that has been going sideways for a while, forms a base, and then starts breaking out with strength. That is where the clean move begins. That is where the probability is highest. And that is where most traders miss out because they wait for too much confirmation.
If you enter early, you ride the whole trend. If you enter late, you only get leftovers.
The big money always comes from catching the trend when it is just waking up.