Requirements for trade in stock market wizard

Most investment books aren't worth the paper they're written on. Authors who have never experienced real investment success espouse the conventional wisdom: Every once in a while, however, there is a true gem: Reminisces Of A Stock Operator , My Story by Bernard Baruch, How To Make Money In Stocks by William O'Neil, No Bull by Michael Steinhardt, Beat The Street and One Up On Wall Street by Peter Lynch, the Stock Market Wizards series by Jack Schwager.

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It's no coincidence that all were written by or about investors with extraordinary track records. How can we expect to learn extraordinary performance except from those who have actually achieved it?

Add another to the list of investment classics: Trade Like A Stock Market Wizard by Mark Minervini. Minervini is one of the greatest independent traders of our generation. Starting with nothing, he made himself a multimillionaire through trading alone by the time he was 34 years old.

This is someone whose track record speaks for itself. More than a decade ago, in an interview with Jack Schwager for one of his Stock Market Wizards books, Minervini summed up his investment philosophy: Expose your portfolio to the best stocks the market has to offer and cut your losses very quickly when you're wrong. That one sentence essentially describes my strategy.

This isn't a get rich quick book. Minervini begins by explaining that learning how to trade in the stock market requires a lengthy education.

In his case, it took 6 years of losing before he put it all together: In fact, I had a net loss" pg. In fact, many of the biggest winning stocks in history traded at more than 30 or 40 times earnings before they experienced their largest advance….. The really exciting, fast growing companies with big potential are not going to be found in the bargain bin. You don't find top notch merchandise at the dollar store" pg. Summing up, Minervini concludes: In Chapter 5, "Trading With The Trend", Minervini hammers home the primary role technicals play in his stock selection: Simply put, no matter how good a company looks fundamentally, certain technical standards must be met for it to qualify as a buy candidate" pg.

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Amplifying this point later in the chapter he writes: It's worth pointing out that this runs contrary to the practice of many great value investors who seek out stocks that are undervalued and misunderstood by the market.

They get in early and make their money when the market comes around to their point of view. Unlike Minervini, they are willing to wait when they have conviction in their fundamental analysis. In Chapter 7, "Fundamentals To Focus On", Minervini tells you what he's looking for fundamentally: Later in the chapter: Chapter 9, "Follow The Leaders", sums up the kind of stocks Minervini likes: As far as timing: In other words, the big money is made buying the leading stocks that emerge first from nasty bear markets.

For example, think about hedge fund manager David Tepper who made billions buying the financials coming out of the bear market. Trade Like A Stock Market Wizard is a great book by a great trader. For those of us interested in the market, it's one we can't afford not to read.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.

I have no business relationship with any company whose stock is mentioned in this article. A New Investment Classic: Trade Like A Stock Market Wizard Nov. Want to share your opinion on this article? Disagree with this article? To report a factual error in this article, click here. Follow Greg Feirman and get email alerts.