The Real Teacher Is The Market

David S. Nassar

by Jayanthi Gopalakrishnan

David S. Nassar is many things: He is the founder and CEO of MarketWise Securities and, a 20-year veteran trader, a New York Times best-selling author, and a columnist for, among other achievements. Nassar is a highly sought-after speaker for trading forums worldwide and has spoken before audiences ranging from Massachusetts Institute of Technology students and faculty to the US government.

STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Nassar via telephone on December 9, 2005.

The most difficult lesson I learned was about how to let go of my opinions before I let go of my money.

How did you get into trading?

I grew up with the markets. I remember my dad, who retired from Prudential after 45 years, talking about IRAs and the marketplace and various financial tools and instruments as they became available. I remember when options were first introduced and even when Charles Schwab came out with his first book. Those were all things that were of interest in our home. I knew from when I was young that I wanted to be in the market.

I made my first real trade while I was in college. So when I graduated, I started at Prudential myself, and started trading with my own money. After many, many mistakes and hard lessons, I basically taught myself the market.

And what were some of those many, many mistakes?

 The most difficult lessons I learned were how to let go of my opinions before I let go of my money. It's a cliché, but it's better to lose your opinion than it is your money. When you're in a trade, obviously you have an opinion about it, and most novices have a hard time letting go of that. It's a lesson you have to learn the hard way.

That is the hardest one, I think.

It really is. It's what most veteran traders say, but it really is the truth, and it is the essence of trading.

And you have to go through it several times before you realize it!

Sometimes you have to go through it almost to a catastrophic level to really learn it. I had several near-catastrophic losses. If you can survive those losses and learn from those mistakes, that will make you a good trader in the end. You learn what not to do. It's the winners that take care of themselves, while the losers require most of your attention.

The losers probably happen more often when you start out.

No question about that.

Do you intraday or position trade, or both?

I'd say a little of both. I stay focused on stocks, options, and financial futures. I don't set out to necessarily intraday trade, but many times when a trade works for you or against you quicker than you anticipated, I like to say that price action dictates your timing more than anything else. By price action I mean that if a stop is met or a target is reached sooner than you expected, then by all means make the trade based on the price action, not some time frame in your head.

  ...Continued in the February 2006 issue of Technical Analysis of STOCKS & COMMODITIES

Excerpted from an article originally published in the February 2006 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2006, Technical Analysis, Inc.

Return to February 2006 Contents