While looking through my archived stock trading articles this past weekend I came across an October 2006 FORTUNE magazine article entitled 12 PEAK PERFORMERS, wherein Marcia Vickers talked to, you guessed it, twelve high achievers to uncover each one’s secret to excellence. The first one on the list? Yra Harris, a stock trader in the pits of the Chicago Mercantile Exchange. Harris is currently a senior partner at Hedge Fund Praxis Trading in Chicago.
According to the article, Harris is known as a “trading god” for one simple reason: he has a reputation for following his own list of strict trading rules. Here are his simple rules:
1. Always have a stop-loss. “The first thing I want to know in a trade is not how much I can make, but how much I can lose.”
2. Never get over exposed. By this, he means that he is never in more than three or four positions at one time. “If I’m running too many [positions] it gets muddled.” Sounds like the opposite of a stockaholic.
3. Never make big bets. Instead of focusing on hitting home runs, Harris focuses on small consistent winners. “I’d rather hit singles or doubles consistently. I do a lot of small trades. That keeps me focused and aware of trades going on around me.” This can keep you focused on the happy zone.
4. Never have a locked in opinion about the market. “Probably the most important lesson I’ve learned is that you can’t get locked into a mindset. A lot of traders just keep adding to a bad position. I’ve seen guys give away huge fortunes. Bottom line: the market is always right-you’re not.” I could not agree more as marriage is a bad word when it comes to trading.
A meaningful list of quotes by the trading god:
- “Don’t ever put your ego out there where you’re afraid to say that you’re wrong, because the market is right and you are wrong. Respect that.”
- “If you’re right at the wrong time, you’re wrong.”
- “The markets are like water. They will flow to the weakest point that they can push through, and they always do.”
- “The market is smarter than you will ever be, with its combined knowledge of all participants. Pay attention to the signs. Be quick to admit that you’re wrong. Don’t be afraid to miss something.”
- “I believe money is fascist. It craves stability more than anything else. Nothing bothers money more than uncertainty.”
Some fairly simple rules huh? And you thought a trading god would have some miraculously secretive formula. Not so. The status of trading god is well within reach of anyone who has simple rules…and follows them.
