AtticManTrader

Every Saturday morning I look forward to receiving an email from an analyst that I rate very highly. His name is John Mauldin and I’ve been subscribing to his newsletter (Thoughts from the Frontline) for a couple of years. His emails are always incredibly well written and (for the most) very insightful. John however is a perma-bear (by his own admission) – Not only was he predicting a severe recession/depression well before many other analysts, he continues to provide commentary that at best can be described as realistic, at worst I would describe him as the harbinger of doom!

Now, before all you John fans out there sharpen your knives, this is in no way an attack on John. I happen to enjoy his insights. The guy is clearly highly educated and understands the markets in a far more intellectual way than I will ever do. I do find his emails provoke a number of emotions about my own trading.

My last few trades have been long positions. These have been based on the technicals (with half an eye on the fundementals of the company). I have made small returns on these trades. If I had been following John’s observations I would certainly not be buying into any stocks at the moment.

However (and to John I am grateful for this) reading John’s emails re-inforces some important trading principles that we should all be aware of.

1. Develop your own plan and stick to it

2. Do your own research (sure – read John’s newsletter, it’s a great read but don’t act on it without doing your own research)

3. Find a trading strategy that works for you (the more I trade the more I realise how uneasy I am at shorting companies)

4. Whatever strategy you are comfortable trading always limit your downside. The only way to make money in trading is to be in the game.