Only Price Pays
Brian Shannon, @alphatrends
Brian and I go way back. Brian used to write blog posts about the stocks we covered in our daily Wallstrip.com video show. When I started StockTwits, I called Brian and told him what we were going to do and he instantly wrote a check to invest. Brian is not only a super-successful trader, but also an avid teacher of technical analysis. It is not an accident that about one-third of the traders featured in this book point to Brian as the mentor who has had the biggest impact on their market careers.
LEARNING THE HARD WAY
A few weeks before I made the transition from a retail stockbroker to full-time trader, I learned that the market doesn't care about my opinion. Of course, I learned this lesson the same way everyone else does, the hard way! I had been trading a company called Chantal Pharmaceuticals (CHTL) really well for a few weeks and held a larger position than I should have over the weekend. My confidence was high and the company had a “miracle wrinkle-removing skin cream” that seemed to be selling very well and getting a lot of positive press. Well, Barron's exposed the company for what it was (a fraud), and the next Monday the stock opened down 30 to 40 percent or so. I sold the stock and was mentally crushed, but it was a great lesson in risk management and proper position sizing. I think it was about six months later when the company filed for bankruptcy. The setback delayed my transition to full-time trader as I ...