Mark Weinstein is a highly successful trader profiled in Market Wizards. After early trading failure, Weinstein diligently studied the markets. Learning from his mistakes, Weinstein eventually became a winning trader in a variety of financial instruments ranging from stock options to soy bean contracts. This article outlines the trading principals Weinstein shares in Market Wizards.

Accepting Responsibility for Losses
One of the turning points in Weinstein’s trading career followed a large soy bean trade loss. After emotionally and financially recovering from the loss, Weinstein realized that his trading results were dictated by his actions, not any form of market luck.

“I don’t believe anyone ever gets wiped out in the market because of bad luck; there is always some other reason for it. Either you were off when you did the trade, or you didn’t have the experience. There is always a mistake involved.”

Waiting for Ideal Trade Conditions
Weinstein’s strategy centers around low risk short term trades. He waits for what he perceives as a “can’t lose” situation to enter the trade.

To control risk, Weinstein trades frequently, selling positions quickly to lock in many small short term profits. Weinstein also pays attention to his gut feeling. If a trade does not feel right he will exit a position.

News
The star trader echoes the belief of other top traders profiled in Market Wizards about using the reaction of the markets to news as a broad indicator.

“A market that is fundamentally and technically poised to move higher is not going to reverse direction because of a news item - even a dramatic one.”

Weinstein’s 7 Trading Rules
1. Work hard and know the important details about the security you are trading.

2. Most successful traders are humble and realize that no one is really above the markets.

3. Understand your personal limits. Knowing your psychological or trading weaknesses, and trading to minimize the impact of these weakness is key to being a winning trader.

4. Have a contrarian mindset, and be wiling to trade against the herd.

5. Be patient and wait for ideal conditions to align before trading. Understanding when to be out of the markets is also very important.

6. Your trading strategy should be flexible and dynamic to change as markets change. Everyday successful traders fight not to become a dinosaur in the ever changing markets. A dynamic strategy that can shift as old inefficiencies evaporate and new inefficiencies appear is very important to trading success.

7. Once a trade is profitable, do not become complacent. Many traders lower there attention to detail once profits are made, but this can be sell destructive.

Final Advise
Weinstein’s final advise is to learn how to lose and quickly cut losses. This advise is also stressed by countless traders in Market Wizards.

Special Note: In the Market Wizards chapter, Weinstein stated that he had no losing weeks that he could remember since 1980 to the date the Market Wizards interview occurred. For full disclosure, many are skeptical that this is possible. The author of Market Wizards, Jack Schwager, talked with a trusted close mutual friend of Weinstein and Schwager, who somewhat verified Weinstein’s performance claims. However, they would release no official performance records.

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