Elite Trader Insights: Jerry Robinson
Episode 18: Interview with Jerry Robinson
Each week we try to unlock the collective wisdom of the Trading Elite. Strategies and unique insights from hours of interviews with top traders, sliced into bite-sized pieces and delivered to your inbox for your pleasure.
Jerry Robinson is a seasoned trader, author, and the founder of FTM Daily, a financial education company. With over 17 years of trading experience, Robinson's journey began in his early twenties and has evolved into a successful career, highlighted by a disciplined approach and strategic financial planning. His expertise spans across various markets, including stocks and commodities.
Key Learnings and Takeaways from the Interview
1. Importance of a Trading System:
Robinson emphasizes the necessity of having a trading system. “Most traders don’t succeed because they don’t really have a set of rules or parameters that they stick to,” he explains. A system helps traders avoid making impulsive decisions based on emotions or unverified tips.
2. Learning from Losses:
Understanding why losses occur is crucial. Robinson advises, “It’s almost your tuition on Wall Street. You’re going to have to lose money... you really aren’t a trader until you’ve had a really bad loss.”
3. Selectivity in Trades:
Jerry advocates for selective trading, focusing on stocks with strong earnings growth and other solid financial fundamentals like Return on Equity (ROE). This helps in filtering out less promising stocks and concentrating on those with high potential.
4. The Psychological Aspect of Trading:
Managing emotions is a critical aspect of trading. “You can’t be afraid... and you’ve got to have a system,” says Robinson. This involves having clear entry and exit strategies and not allowing emotions to influence trading decisions.
5. Understanding Market Trends:
Robinson underscores the importance of recognizing and aligning with market trends, noting that trading against the trend is often a losing battle. Identifying trends can significantly enhance the success of trades.
6. The Role of Stop-Loss Orders:
A disciplined approach to using stop-loss orders can safeguard traders from significant losses. Robinson shares that setting a stop-loss immediately after entering a trade is a practice he follows religiously.
Related Reads:
7. Continuous Education:
Ongoing education through books, mentorship, and other resources is vital. Robinson recommends "How to Make Money in Stocks" by William J. O'Neil as an excellent resource for both novice and experienced traders.
8. Profit and Loss Management:
Knowing when to exit a trade is as crucial as entry points. Robinson stresses not letting a gain turn into a loss by adjusting stop-loss orders as the trade progresses favorably.
9. Leveraging Technology and Resources:
Robinson uses tools like Investor’s Business Daily (IBD) and proprietary indicators developed through his company, Trigger Trade Pro, to aid in decision-making and to streamline the trading process.
10. Mentorship and Community:
Engaging with a community or seeking mentorship can provide invaluable insights and guidance. It’s something Robinson wishes he had done more of in his early trading days.
This is Episode #1 from the Chat with Traders series….back to where it all began. While I found a lot of the content of this episode pretty basic, often this is the stuff you need to hear regularly.
Jerry’s approach to trading emphasizes not only the technical aspects but also the psychological components of trading. His philosophy, "you make money when you buy, not when you sell," highlights the importance of active risk management right from the point of purchase, which is a shift from traditional profit-taking methods.
Robinson intertwines discipline and emotional control with strategic planning, underscoring resilience and adaptability as crucial for sustained success in trading. A good summary all-round this one.
Cheers
Marto