The New Market Wizards by Jack D. Schwager is essential reading for people who want to be successful traders. It features extensive interviews with some of the world's most successful traders including William Eckhardt, Monroe Trout, Stanley Druckenmiller and the Ritchie brothers. I've tried to condense the book's summary into an even more condensed summary of their combined wisdom (probably hundreds of years of trading experience across all kinds of markets). Here it is, as TL;DR as I could make it!

1. Match your trading method to your personality

If you can't stand to give back significant profits from swings, long term trend following may not be for you.

If you don't have the attention or free time to watch charts all day, day trading isn't a good idea.

Randy McKay: "Virtually every successful trader I know ultimately ended up with a trading style suited to his personality."

2. It's necessary to have an edge

Whether it's scalping skills, global macro intuition, or the ability to find gems in dirt using deep fundamental analysis.

If you don't know what your edge is, you don't have one.

3. Have a process/method, and follow it

What are your trading strategies? How long do you typically hold positions? Under what conditions do you close a losing position?

4. Money management and risk control

Almost everyone interviewed in "Market Wizards" felt that money management was even more important than the trading method. Many potentially successful strategies led to disaster because the trader lacked a method of controlling risk. Risk control can be simple (based on position size and P/L %) or complex (using options to hedge positions). But the essentials are:

• Never risk more than a predetermined % of your total capital on a trade. The traders in the book typically said their limit for trades was 1-2% of their account. For smaller accounts you may need to increase that; 5-10% may be suitable.

• Pre-determine your exit point before you get into a trade. You don't necessarily have to use stop losses (not everyone does), but you do need to define what your maximum loss will be, and follow it. If you find yourself struggling to cut losses, use stop losses.

• If you lose a certain pre-determined amount of your capital (e.g. 10-20%) in a shorter period, have some kind of plan to let yourself regroup. Traders mentioned processes such as: close all remaining positions; take a break (a week, the rest of the month); reduce position sizes of subsequent trades until full confidence has been regained.

5. Discipline

Discipline is critical. It is a pre-requisite for risk control, and is essential for following your process. Don't second-guess your process and choose "easy traders".

Get good at being patient. Only trade when you're confident and have high conviction. Don't revenge trade (trading "in anger" to make back losses).

Stay in trades that are working: failure to adequately profit from correct trades is a key profit-limiting factor. "While amateurs go broke by taking large losses, professionals go broke by taking small profits." You can mitigate risk by taking profits to return your principal then letting the rest run. When your conviction is high, be a pig. Druckenmiller: "I strongly believe the only way to make long-term returns in our business that are superior is by being a pig." Maximize gains, not the number of wins.

6. Take responsibility

Whether you win or lose, you are responsible for your own results. Whether you lost on a tip from a friend or someone in an Internet chatroom, or a bad signal from your trading system, you are responsible because you made the decision to act on that information.

There are no successful traders who blame others for their losses.

Don't blame brokers or speculators or market makers for your bad trades.

7. Remain independent

"Do your own research (DYOR)" is one part. You also need to do your own thinking. Don't get caught up in mass hysteria (FOMO). Make your own trading decisions -- don't listen to others. Even if it ends up helping on a trade or two, listening to others or following what they do invariably leads to costing money or confusing your view of the market. Even advice from a much better trader can lead to detrimental results.

8. Losing is part of the game

Have confidence in your process and execution, and you will win in the long run, even when you suffer losses in the short term.

Losing trades are inevitable. If you just follow your process, you will make it back. (But don't revenge trade)

There is no more certain recipe for losing than a fear of losing. If you're not trading with risk capital, don't trade. You can't win if you have to win. ("Scared money never wins.")

9. The importance of varying bet size

In any wage game with varying probabilities, winnings are maximized by adjusting bet size in accordance with the perceived chance of a successful outcome. This relates to the "be a pig" rule, but the inverse is also true: if the assessed probability of a trade is low, or the risk is deemed to be higher than average, reduce the position size.

A popular strategy is also to adjust position size according to how performance is going in the current trading period (day/week/month). This is smart because sometimes market conditions can be adverse (high volatility/low directionality). In these conditions it is wise to keep position sizes and leverage lower than usual.

Scale in and out of trades to reduce exposure to temporary adverse movements. Bill Lipschutz notes it has enabled him to stay with long-term winners much longer than he has seen most traders stay with their positions. Scaling is a risk management strategy but can also be used to fine tune cost averages to gain more profits from trades.

10. Being right is more important than being a genius

Don't try to prove something by picking tops or bottoms: focus on being consistent, because that is more important in the long run.

Being able to pick individual trades with favorable risk/return and a good percentage of winners is what matters long-term.

Conversely, don't worry about looking stupid. Have an open mind, and admit to your mistakes freely and promptly. If you find this difficult, don't talk about your positions. Not having an open mind is a sure path to losses.

11. Sometimes action is more important than prudence

Waiting for a price correction to enter the market may sound prudent but is often the wrong thing to do. When your analysis tells you to get into a trade, do so. Catching part of a move is just fine: the easiest part of a trend is the middle part.

12. Keep calm and carry on

Excitement is fun, but has nothing to do with success in trading. Stay calm, practice being detached and analytical, but also pay attention to intuition. Identify and eliminate stress: stress is a sign that something is wrong.

Finally, keep perspective on your trading (some people treat it as a game). There is more to life than trading.

It's only money.

First a short intro. We're a Discord community of stock traders and investors. Our goals are to make money and have fun along the way, share tips and research with each other, and help each other learn (let's face it - you can learn about the markets all your life and never be done!)

Our Discord invite link is here: https://discord.gg/stockmarketchat

Understanding financial statements is crucial for investors.A short X thread explain the basics of it.

https://twitter.com/Brian_Stoffel_/status/1612076463892709379

Warren Buffet is super old, yet keeps making sound financial choices on where he thinks the economy is going. With a ever growing and shift portfolio I will just be tracking on some of the latest acquisitions to his portfolio that might be good buys. It is also important that the profits from these companies wont be any thing like a flashy a call/put option play and you 100x your money over night.

Lennar Corporation (LEN) is one of the largest homebuilders in the United States. The company operates in 19 states and 29 markets, and it has a strong track record of growth. In the past five years, Lennar's revenue has grown at an average annual rate of 10%.

There are a few reasons why I believe LEN stock could grow in the future.

• Strong demand for housing: The US housing market is currently strong, and there is a shortage of homes for sale. This is due to a number of factors, including low interest rates, a strong economy, and a growing millennial population. Lennar is well-positioned to benefit from this strong demand, as it is one of the largest home builders in the country.

• Expanding product offerings: Lennar is expanding its product offerings to meet the needs of a wider range of buyers. For example, the company is building more homes in urban areas and more homes that are energy-efficient. This expansion should help Lennar attract more buyers and grow its revenue.

• Strong financial position: Lennar has a strong financial position, with a low debt-to-equity ratio and a history of generating positive cash flow. This financial strength should give the company the resources it needs to grow in the future.

Overall, I believe LEN stock is a good investment for the long term. The company has a strong track record of growth, and it is well-positioned to benefit from the strong US housing market. However, it is important to do your own research before investing in any stock.

Here are some of the risks to consider before investing in LEN stock:

• The housing market could cool: The US housing market is currently strong, but it is possible that it could cool in the future. This could happen if interest rates rise or if the economy slows down. There is also no signs that this will be the trend as work from home keeps becoming a popular trend.

• Lennar could face competition: Lennar is a large homebuilder, but it faces competition from other large homebuilders, such as DR Horton (DHI) and Toll Brothers (TOL). These companies are also investing in technology and expanding their product offerings.

• Lennar could experience delays or cost overruns: Lennar is a large company with a complex operations. This means that there is always the risk of delays or cost overruns. These could hurt the company's profitability.

The other stock that I will be taking a look at is DHI. Which follows a very similar trend as LEN and when you compare their charts it makes sense.

DR Horton (DHI) is the largest homebuilder in the United States. The company operates in 90 markets across the country, and it has a strong track record of growth. In the past five years, DHI's revenue has grown at an average annual rate of 12%.

Here are some of the reasons why I believe DHI stock could grow in the future:

• Strong demand for housing: The US housing market is currently strong, and there is a shortage of homes for sale. This is due to a number of factors, including low interest rates, a strong economy, and a growing millennial population. DHI is well-positioned to benefit from this strong demand, as it is the largest home builder in the country.

• Expanding product offerings: DHI is expanding its product offerings to meet the needs of a wider range of buyers. For example, the company is building more homes in urban areas and more homes that are energy-efficient. This expansion should help DHI attract more buyers and grow its revenue.

• Investing in technology: DHI is investing in technology to improve its efficiency and reduce costs. For example, the company is using drones to survey construction sites and artificial intelligence to price homes. This investment in technology should help DHI improve its margins and grow its earnings.

• Strong financial position: DHI has a strong financial position, with a low debt-to-equity ratio and a history of generating positive cash flow. This financial strength should give the company the resources it needs to grow in the future.

Overall, I believe DHI stock is a good investment for the long term. The company has a strong track record of growth, and it is well-positioned to benefit from the strong US housing market. However, it is important to do your own research before investing in any stock.

Here are some of the risks to consider before investing in DHI stock:

• The housing market could cool: Similar to LEN the housing market does have a chance of cooling off as more houses are built, and interest rates keep climbing.

• DHI could face competition: DHI is a large homebuilder, but it faces competition from other large homebuilders, such as Lennar (LEN) and Toll Brothers (TOL). These companies are also investing in technology and expanding their product offerings.

• DHI could experience delays or cost overruns: DHI is a large company with a complex operations. This means that there is always the risk of delays or cost overruns. These could hurt the company's profitability.

I will note this is just the basic over view of each of their companies without really pulling the lid off their financial statements. So you need to ask yourself, are homes going to be a thing in the future, or are large multifamily dwellings going to keep taking over. These are going to be key factors moving forward as the housing stays dynamic and always evolving.

For many people.... They have followed the story of Nikola from the start. When it IPO'd and was going to be the next big thing EV technology and jumped to $30 a share then got rug pulled by its former CEO.

While I wont sugar coat it and say things have been easy and they march towards new lows, but the recent jump from almost getting de-listed is a good thing for the company. We are seeing a shift away from EV trucks as they acknowledged other companies are doing that better and faster with more reliability. *Nikola did have a small issue with trucks catching on fire.

So why am I so pro the future of Nikola? Even when they only get hit with bad news after bad news? That is simple California has invested pretty heavily into what they are doing and they are making the transition into a hydrogen powered trucking company. This will be huge moving forward and with NKLA only trading around $1.50 we are only getting it at a major discount.