The Best Traders in The World Miss Trades

One of the numerous benefits that are afforded to traders via Twitter, StockTwits, and blogs are different trading styles. Some traders use fundamentals and are more concerned with free cash flow than head and shoulder price patterns. Others may be trend followers who screen for breakouts and new highs with little concern for anything else. While others may seek patterns, cycles, sentiment, or major events that could move a market or security.

Each trader has their own way of viewing the market and by the use of social media you become exposed to tens if not hundreds of different trading styles. This can be a great way to learn but it also can toss you like a buoy in a storm.

If you follow me on Twitter/StockTwits or read my blog (which I assume you do since you’re reading it now!) then you know I don’t post trade recommendations. Simply put, I do not write or tweet to make you money. Sorry. I write to express my views and provide (hopefully) unique chart setups that I find interesting or important. However, there are others on social media that post every entry and exit from a position. Some may follow that trader into a trade and others may sit ready to pounce when the trade goes wrong. I suppose that’s what makes a market.

No one trading style can catch every major move in the market. If you stick to fundamentals then you likely missed the momentum names in 2013 like Netflix and Tesla. If you look for mean reversion you also were likely disappointed in 2013 with few major dips to pick up. And if you weren’t concerned with extreme value in 2009 then Citi and Ford probably weren’t in your portfolio.

And that’s okay!

If you set the expectation level to ‘perfect’ then you might as well leave this business all together. The best traders in the world miss trades, and so will you. You’re suppose to. The idea of curve-fitting your strategy to pick up every winner, no matter if it’s an earnings pop, a momentum divergence, or a 3-week breakout is a fools game.

Developing a system or a process that works for you should take time and effort. Learning the psychology behind trading can be a critical and is often an overlooked step. Twitter, StockTwits, and trader blogs can be a great resource to learn and challenge your way of thinking. But understanding that you can not be the wearer of all hats and be successful in the long-term is critical.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.