VanTharp's Commentaries
May
24
2010
Technical Research Not Resulting in Profits
by VanTharp
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Q: I have been providing technical stock research to institutional money managers for 20 years. I am very good at reading trends and trend dynamics. While this analysis has helped my clients significantly over the years, I have not been able to translate this analysis into consistent profits in my personal trading. Do you have any general advice for someone in my position?
A: Well, fundamentally you can spot when things are out of alignment, but you need to do the following:
- Get your psychology in order so you stop making mistakes.
- Identify your risk when you enter a trade.
- Understand how to control your reward to risk throughout the course of a trade.
- Understand market types. What you do currently won’t work when market conditions change.
- Understand position sizing strategies and their importance in meeting your objectives.
- Write a thorough business plan to guide your trading.
- Develop several good trading systems. Right now, what you think is your system is actually just your "analysis."
In other words, you have to master a lot more of what we teach.
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