There are no Secrets
When I first started trading I read all the books I could find on the topic. I backtested all these different systems trying to find my ‘holy grail’. Yet I was losing money. I kept jumping from system to system or trying to improve a perfectly good trading strategy.
Several years and many mistakes later I started to develop the skill that is (in my opinion) the key to being a profitable trader. That skill isn’t programming or backtesting in a futile search for the perfect system. I didn’t figure out a new revolutionary way to look at the market. I developed discipline.
DALBAR Studies Show Investor Underperformance
Take a look at our next picture. This is from the famous DALBAR studies. It compares the returns of the typical investor versus the respective benc…