Mark Weinstein: High-Percentage Trader
After a short duration of being a real estate broker, Mark Weinstein chose to become a full time trader. After his early failure, he decided to seriously study the market and earn by trading.
In the old days, commodities followed chart patterns much more than they do now. The markets were much orderly as very few people knew about technical analysis. He got a break by learning technical analysis at a time when it worked very well.
He employed his own custom made computer system to monitor technical indicators to measure market momentum, rather than using the standard values for those indicators. He used his own values and frequently adjusted it according to the market conditions. He combined these real time data with charts, Fibonacci retracements, Elliott Wave analysis and an uncanny sense of market. Only when he feels that everything is lining up correctly, he puts on a trade considering it to be the perfect time.
Many times when he is sure of the market going up, he doesn't try to pick the bottom and he is out before it tops. He likes to trade the mid range because of high momentum.
He always used forms of technical analysis but interpreted them through gut feeling. He always looks for a market that is losing momentum and then goes the other way.
He shares that the stock market doesn't give a meaningful trend to enjoy as the commodity market. This is because when institutions start selling, they don't do it at one price level. They scale out as the market goes up which makes the market choppy.
His reason for winning consistently in the market is that he doesn't try to figure out where the market is going, instead he allows the market to him. With so many kinds of technical inputs, a trader will always get a signal before the market is about to do something.
Mark believes that each stock has its own personality. For example, he has never seen a good rally without the utilities leading the market. When the interest rates are expected to go up, utilities go up and when the interest rates go down, portfolio managers jump into stocks.
According to him, one of the biggest misconceptions people have is that they always expect the market to react to news. It happens that when bad news has come out, the market initially goes down but then quickly rebounce. People fail to realize that if the market is fundamentally and technically fit to move higher, it will not reverse its direction because of a news item.
He lists his rules of trading which is mentioned below:
- One should always do his homework.
- Do not be arrogant. The best traders are the most humble people one can ever meet.
- Avoid trading until an opportunity is presented.
- Keep your strategies flexible enough to change with the environment. People often make mistakes by trading with the same strategies all the time.
His advice for a trader is that he has to learn how to lose. If he is always winning, then on losing he becomes hostile and blames the market instead of learning why he lost.