A popular market breadth indicator, the McClellan oscillator is one of the tools that MoneyShow's To...
Lessons From a Market Veteran
03/13/2014 7:00 am EST
Jake Bernstein has been trading the markets for 44 years, and he reveals the three mistakes he hopes new traders will avoid.
ROB: It is not often we get the chance to talk to someone with 44 years of trading experience, but that is my pleasure right now. Hi Jake Bernstein, it is good to have you with us.
JAKE BERNSTEIN: Hi Rob, my pleasure and I am feeling every one of those 44 years.
ROB: In 44 years of trading, what lessons stand out most significantly?
JAKE BERNSTEIN: There are several. The first one is that I would shortcut the process. It took me 15 years to learn how not to trade because I believe a lot of the stuff that I should not have believed, which is not to put anybody else’s stuff down, but you have to trade your own game. You have to find out what resonates with you. I was too busy believing all the stuff that I was reading and I would not do that again. The second lesson, start with enough money. I know that everyone says that you really have to be able to live through the draw down. The third lesson, be out of the box. Right now, everything I do is pretty much out of the box and that works for me.
ROB: What does it mean when you say it is out of the box?
JAKE BERNSTEIN: I do not do, and again no offense intended to anyone’s pet methods, I do not do Fibonacci, I do not do Elliott Wave, I do not do Gann, I do not do candlesticks, I do not do traditional moving averages, I do not do the usual support resistant stuff, and it does not work for me. If I am going to do something, it has to be unique, it has to be something that I discovered myself or found something good and changed it so that it is unique to me.
ROB: You would recommend to a trader just starting out, especially trying to follow in your footsteps, take the time to build something that is your own.
JAKE BERNSTEIN: Yeah, read all the stuff that is out there, because some of it may resonate with you, but for me there is a big difference between intuitive and between being psychic. I can talk to a trader for five minutes and tell you if they are going to be successful or not. I can study the markets with my intuition and my intuition absolutely sucks, it is the worst thing in the world, so if I think something is going to happen, it is probably not going to happen, but if I am looking at something objective, it works for me. You have to think about what really resonates with you and certain things I love. If I love my work and I love what I am doing, it is going to work for me. If I am looking at something and say, “Does this crap really work?” If it does not, I cannot do it.
ROB: It is great advice from a veteran trader. Thanks Jake. You are watching the Money Show Video Network.
Related Articles on TRADING
While fundamentalists delve into economic and financial data to analyze the market, technicians emp...
Being able to determine market direction is a trader’s most important skill, writes Markus He...
Markus Heitkoetter discusses reward/risk ratios and winning percentage, and why determining the dir...