The Thinking Trader

At some point, thinking generates greater returns than trading relentlessly. Let's pause and ponder.

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Traders should think more than they do.

Most people are not wired to become traders. Enjoying losses, rejecting traditional work ethics, and getting comfortable with fear - these are just some of the things you must learn as a trader.

To change your mindset into that of a winning trader, you need to gain experience and do some serious pondering.

Keep thinking about what is the right thing to do as a trader. And do it. This is what differentiates a trader from a gambler.

A gambler knows what he is doing is wrong, that he is fighting against the odds, and continues with it. As a trader, you stop doing what’s wrong and keep doing what’s right. This means that you trade only when the odds favor you.

One of the central themes in this guide is to limit your trades. Trading gives the impression of freedom. Traders are free to trade what they want, whenever they want. Indeed, traders are free to decide how they wish to trade. Yet, the key to successful trading is to use this freedom responsibly.

This guide contains ideas from samurais, philosophers, and professors. Over the years, I’ve encountered many ideas in life that are useful for traders. It is hardly surprising as both life and markets are characterized by uncertainty. Good traders learn to be comfortable with uncertainty.

I hope this guide encourages you to look for more parallels between life and trading. Then, as we become better traders, we become better persons.