Master traders always talk about finding your edge in the market, but how the heck do you find your edge and apply it successfully in your trading?
On today’s episode of The Trader’s Mindchat Show, Mike & Melissa chat with Dennis Wilborn to discuss the importance of finding an edge in the stock market, how you can train yourself to identify your trading edge in the market, and apply it to be a winning formula.
Dennis Wilborn is the founder of Active Trend Trading & was featured in “How To Make Money In Stocks, SUCCESS STORIES” by Amy Smith. He is also the IBD Meetup Leader for BAMM (Bay Area Money Makers).
Watch the Trader’s Mindchat with Dennis Wilborn here:
LISTEN TO THE SHOW HERE:
Here are the Top Ten Trading Highlights with Dennis Wilborn:
- You need a clear simple approach that helps people increase or multiply profits and minimize loss: Become a master of the systems, don’t be too focused on the target.
- Don’t Overcomplicate the Process: The engineer in him initially wanted to complicate the process and try to create his own system. It took a while for him to understand what IBD’s Bill O’Neil was talking about regarding the aspect of keeping it simple.
- Mindset is the Missing Link. You really need to analyze and understand your beliefs and go 7 layers deep. A quote he loves is “Don’t conform, but be transformed by the renewal of your mind.”
- Keep Your Process Simple: His process entails different trend trading systems. He cherry picked what were best in each system and utilized IBD’s watch list. Then he combined that with his own expertise and technical analysis to create a system that proved to be a winning formula.
- Life as a Trader means you need to be open to Continuous Learning: Keep training yourself! You need to go into trading like you are studying for your doctorate. You are continuing to learn and don’t let your ego get in the way of learning from other people.
- Back Testing is important. He back tested for over 20 years against the S&P. Once he liked the results, he Forward Tested them and put into his trading system.
- Some of his Exit and Entry Rules consists of:
- Focus on one entry (particular pattern, similar to Mark Douglas describes in his book “Trading In the Zone.“
- Become a master of one entity trigger and generate consistency
- Create Disciple and forces you to be patient
- Utilize True Strength Index and an Oscillator like an RSI
- Have Fun With Your Trading: Stop taking yourself so seriously. Trading is a very humbling experience.
- Rehearse Your Trades! He can’t stress enough the importance of simulation. Practice on a daily basis.
- Track Your Trades: He uses a Journal to track his trades, including his Active Trend Trading Journal. He asks himself: What went right with this trade? What did i learn from it? How can I improve? etc.
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To continue crushing it with your trading, check out the following MARA blog posts:
4 Ways to Boost Trading Confidence!
Win the Mental Battle of Trading with Dr. Brett Steenbarger
Top Ten Trading Highlights with Siam Kidd, Founder of Realistictrader.com
Melissa Lamothe is a bestselling author and co-host of “The Trader’s Mindchat Show” with husband Michael Lamothe. Melissa has 15+ years of marketing and writing experience and is the marketing director/content supervisor for Mara Wealth.