What role does luck play in trading? How much of last year's profit came from luck? Will this year's luck change and cause losses? Najarian believes that trading does involve luck. But for him, luck is not God's will, but the product of thorough planning and detailed calculation.
"Luck is important. Some traders are just unlucky. But you also have to take some responsibility: 'My stop loss was triggered as soon as the market opened.' Then blame the alarm clock, blame the wife or blame the children, and don't think you have any responsibility: 'When can this kind of thing not happen, why did it happen on the day when IBM announced its earnings or the expiration date.' From a certain point of view, this is indeed luck, but it also involves irresponsibility."
Albert Ellis once said: "The good times in life are when you can decide things for yourself. You don't blame your mother, society, or the president. You have to understand that you control your destiny."
"I know a clearing company executive who told me that whenever a trader came to him, he would ask: 'Do you consider yourself a lucky person?' Traders usually ask back: 'What do you mean by luck?' He replied: 'Do you think you are unlucky? Walking on the street, bird droppings fall on your head instead of someone else's? Does your umbrella get blown away by the wind? Are you splashed with dirty water by a car? If these things happen to you, then I won't help you clear.'"
"He believes that everyone creates their luck to some extent, and you shouldn't stand next to the puddle. Of course, you are powerless when the bird flies over your head. But if some bad things always happen to you, then it may not be a matter of luck, it may be that you make bad things happen."
"Some people do some negative things to themselves. Do I believe in luck? Absolutely. Self-made people may over-admire themselves. I think that everything involves some luck to some extent. If I happen to buy a stock at the best time, it may be because of myself, or it may be luck. If I am very confident, I may think it is my skill: from a hindsight perspective, I may also think: 'It's really lucky.' We often prefer luck to skill."
"You have to be willing to take responsibility for your actions. You can't always think: 'It's all because this guy messed up, so I'm trapped, the stock price opened down $10, and I'm holding a bunch of stocks, completely powerless.' This is not an acceptable excuse. You have to be able to say: 'I did this for these reasons, and I was wrong, so I admit the loss.'"
"This is what I want to hear from my traders. But when many traders encounter trouble, the situation is just the opposite. They want to blame everything on others. Therefore, a responsible attitude is very important. For new traders, if there is a tendency to shirk responsibility from the beginning, we will judge that he has no chance of success. We will watch him closely."
You might as well recall the last three loss experiences, how did you react? Do you blame the heavens and others? If so, you have not cultivated the correct sense of responsibility. Without this sense of responsibility, you cannot analyze the cause of the loss; more importantly, you have no chance to correct the mistake. As a result, you will continue to lose for some of the same reasons.
Najarian believes that many people look unlucky, mainly because they want to fail. They subconsciously want to fail, and what is reflected on the surface are some bad things.
"We are here to make money. Some people have a sense of guilt about various things in life-they are not sure whether they deserve to have this, or whether they are smart enough to do that."
Najarian suggests that to improve your luck, you first need to have a desire to win. Do you feel uncomfortable about trading success for some reason? Secondly, you have to expect some things that may go wrong. For example, have you paid the data supplier? Has the data file been backed up recently?
Patience and courage to exit, understand the difference. From a certain point of view, trading success is nothing more than mastering timeliness; in other words, the timing of entering and exiting the market. Mastering timeliness is a kind of decision and judgment: how do you know when is the right time?
"Timing and patience are similar, and of course, there is a connection. Timing: When should I take profit? This depends entirely on the target of the trade. During the Gulf War, I traded IBM and had a lot of IBM premium buy options. Due to the various uncertainties caused by the war, the price volatility was high and the premiums were very expensive."
"In the $15 wave of rise, I established many spread positions, not just earning 1/2 point of profit. If IBM opens up $15, I can make millions of dollars immediately. But. To make millions of dollars, I have to be willing to make $50,000 first because I sell up in batches every 1/2 point."
"In some cases, the market slowly rises or gradually consolidates, and you have to wait patiently. People who want to get it done at the bottom or top will always get a hot potato or sticky hands. My brother Peter also trades in the company, he has a strong self-discipline and is very good at mastering timeliness. He tries to read the minds and trading plans of other players in the field. If they hold short positions and are in panic, he will not immediately end his long positions, because the price will be pushed up."
"On the contrary, if he also holds a short position, he will be very impatient, and immediately pull the trigger, because he knows that other shorts in the field also need to cover. Sometimes you should be patient, sometimes you can't be patient, you have to understand the difference between the two."
The biggest problem with the above conclusion is obviously: "How do you know the difference?" Najarian believes that the key to "knowing the difference" is "trading according to the plan."
"Partly depends on experience, partly on acting according to the plan. Do you know? Many professional traders spend a lot of time making trading plans but never follow them. This is stupid. We don't have the wisdom to be free and easy, so we have to act according to the plan. We have to make the advantage stand on our side as much as possible, so we have to stick to our plan."
"Of course, the plan may still be adjusted. Earnings reports are announced or the market spreads rumors of mergers and acquisitions. If I think the market may change as a result, I will adjust the target price according to the new variables, and then stick to the new trading plan."
Therefore, in the trading process, if new situations occur, the trading plan can still be adjusted. In short, to ensure that the timing of entering and exiting the market is correct, you have to plan, include them in the trading plan, and then strictly follow them.