Some Random Thoughts

Biotech continues to hold the most slots (24). However, it also lost the most slots for the week (-4). This is likely because it has recently pulled back. So far, I view this as a positive development for position trading (like my Core Trading Service). Software, overall, gained the most slots for the week (+5). This action reflects the recent breakout here. However, as usual, follow-through will be key. It’s already stalling as this is being published. Lack of follow-through has been a recurring pattern lately. If this continues, we’ll likely have less than 100 stocks in the list. Remember, cash is treated as an asset class. Energies, overall, gained the second-most slots (+4). This action reflects renewed strength here (XLE is right at all-time highs). Defense lost its last slot. It appears to have rolled over (scroll down), despite the war. This is a testament to technicals: believe in what you see and not in what you believe. Once again, there’s still a lot of “one-offs” and “two-offs” in the list. I don’t view this as a broadening rally, but rather as having to search through many sectors for momentum. This action reflects the mostly sideways action in many sectors (and the indices themselves).

Biotech, basis the IBB, has recently pulled back. Again, so far, this is bullish for position trades. However, follow-through will be key.

Despite the war, Defense continues to slide out of a Bowtie.

Here’s The Sector Breakdown:

Surprises Tend To Happen In The Direction Of The Trend

If you’ve been following here on Substack and X, you’ll notice a recurring theme is “surprises tend to happen in the direction of the trend.” Recently added MMED is up over 11% around midday today (09/01/26). See my YouTube Channel for Dave Landry’s The Week In Charts for more on “surprises.”

Closed “Trades”

“Ride your winners and cut your losses short" remains the mantra for momentum trading. Once again, most of the stocks that closed out for losses/small gains were recent additions. Again, this is the normal “ebb & flow” when “jockeying for position.” The idea is to keep chipping away at it until big winners are caught and ridden for a very long time. Speaking of which, notice the biggest winner, SYRE (85%), was previously on the list since March. It was removed due to a recent loss of momentum (scroll down). Note: This stock was added before the 100% rule was implemented. See this Substack post for more on the recently implemented 100% Rule.

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The Top 10 Gainers Since Added

Again, ride your winners and cut your losses short is the mantra. Notice that the biggest winners have been on the list the longest. Once again, the list isn’t as impressive as it was earlier this year. This is because many large gainers that had been on the list for a year or so have recently lost momentum (e.g., WDC 578%, LITE 638%). We’ll see if newer leaders, such as Biotech, can continue to deliver triple-digit long-term gains.

The Stocks

Here are the top 10 gainers:

TXG,TWST,AMLX,ETON,CAKE,PLSE,XNCR,DINO,MCS,VLO

Here’s The Complete List (.CSV and TeleChart Watchlist):

Read more

Some Random Thoughts

Biotech continues to hold the most slots (28), gaining 4 for the week. This action reflects its continued rally out of a Landry Light Pullback (scroll down). Software-Infrastructure lost the most slots (-4). This action likely reflects the fact that Software overall, based on the IGV, recently stalled at its prior peak (scroll down). Many other sectors (e.g., Transports and Defense) and some indices themselves (e.g., the Nasdaq and Russell 2000) have also recently stalled at their prior peaks. Insurance lost 2 slots. This is likely due to sideways trading here (KIE) for the last 7-8 weeks. Semiconductors gave up their one and only slot. A top remains in place here (SMH). Despite the continued strength in Energies overall (6), there were no net additions here. Once again, there’s still a lot of “one-offs” and “two-offs” in the list. I don’t view this as a broadening rally, but more so as having to search through many sectors for momentum. This action reflects the mostly sideways action in many sectors (and the indices themselves).

Biotech, based on the IBB, continues to rally out of a Landry Light Pullback.

Software, based on the IGV, recently stalled at its prior peak.

Here’s The Sector Breakdown:

Surprises Tend To Happen In The Direction Of The Trend

If you’ve been following here on Substack and X, you’ll notice a recurring theme is “surprises tend to happen in the direction of the trend.” Recently added HELP is up over 9% around midday today (08/25/26). See my YouTube Channel for Dave Landry’s The Week In Charts for more on “surprises.”

Closed “Trades”

“Ride your winners and cut your losses short" remains the mantra for momentum trading. Once again, most of the stocks that closed out for losses/small gains were recent additions. Again, this is the normal “ebb & flow” when “jockeying for position.” The idea is to keep chipping away at it until big winners are caught and ridden for a very long time. Two stocks, DCO and PANW, were closed out at decent gains of 34.70% and 44.50%, respectively. This reflects momentum beginning to wane in these issues (and possibly the aforementioned sideways action overall). Turnover remains relatively high (13%). Most of these issues were relatively new additions. Once again, this action could suggest that momentum is waning. Should this lack of new follow-through continue, we’ll likely end up with cash “slots” (less than 100 stocks). On a positive note, two relatively new additions, TWST and TXG, hit the 100% initial profit target. Half of the position is exited when this occurs to create a “free position” on the remainder. See this Substack post for more on the recently implemented 100% Rule.

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The Top 10 Gainers Since Added

Again, ride your winners and cut your losses short is the mantra. Notice that the biggest winners have been on the list the longest. Once again, the list isn’t as impressive as it was earlier this year. This is because many large gainers that had been on the list for a year or so have recently lost momentum (e.g., WDC 578%, LITE 638%). We’ll see if newer leaders, such as Biotech, can continue to deliver triple-digit long-term gains.

The Stocks

Here are the top 10 gainers:

SYRE,TWST,TXG,AMLX,ETON,CAKE,XNCR,MCS,MBX,PLSE

Here’s The Complete List (.CSV and TeleChart Watchlist):

Read more

Some Random Thoughts

On the surface, it doesn’t look like much has changed in the sectors. However, there was a considerable amount of turnover: 15% for the week; scroll down to “Closed.” Biotech continues to hold the most slots (24), +1 for the week. This action reflects the recent renewed strength here. It’s making new highs at the time this is being published. Drug Manufacturers-Specialty & Generic lost two slots this week. This action reflects the recent stalling action in Major Drugs overall (PPH) as they approached their old highs. Oil & Gas-Refining & Marketing lost one slot. Energies overall have been improving. Since there’s not always a direct correlation between crude oil prices and refining, we could see more energies in general and fewer refiners (although the refineries are hitting all-time highs as this is being written). There’s still a lot of “one-offs” and “two-offs” in the list. I don’t view this as a broadening rally, but more so as having to search through many sectors for momentum. This is especially true when you study sector indices in previously strong sectors that have lost momentum. Some examples here would be REITs (XLRE), Health Care Providers (IHF), and Insurance (KIE).

After a little stalling, Biotech, based on the IBB, is back to breakout mode.

Here’s The Sector Breakdown:

Surprises Tend To Happen In The Direction Of The Trend

If you’ve been following here on Substack and X, you’ll notice a recurring theme is “surprises tend to happen in the direction of the trend.” AMLX, for instance, is up nearly 50% today as of this publication. Also, see my YouTube Channel for Dave Landry’s The Week In Charts for more on “surprises.”

“Tend” is the keyword in the “Surprises tend to happen in the direction of the trend.” sentence. Occasionally, stocks do get whacked. “It” happens. When “running” a momentum portfolio that focuses on breakouts, it’s good to have a lot of stocks to make up for the occasional debacle.

Closed “Trades”

“Ride your winners and cut your losses short" remains the mantra for momentum trading. Once again, most of the stocks that closed out for losses/small gains were recent additions. Again, this is the normal “ebb & flow” when “jockeying for position.” The idea is to keep chipping away at it until big winners are caught and ridden for a very long time. Based on the amount of turnover with newer issues, it could suggest that momentum is waning. Once again, should this lack of new follow-through continue, we’ll likely end up with more cash “slots” (less than 100 stocks).

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Notice that we did close out one big winner, ATEX (+55%). Unfortunately, it didn’t reach the 100% initial profit target level. See this Substack post for more on the recently implemented 100% Rule.

The Top 10 Gainers Since Added

Again, ride your winners and cut your losses short is the mantra. Notice that the biggest winners have been on the list the longest. Once again, the list isn’t quite as impressive as it has been earlier this year. This is because many large gainers that had been on the list for a year or so have recently lost momentum (e.g., WDC 578%, LITE 638%).

The Stocks

Here are the top 10 gainers:

SYRE,TXG,TWST,ETON,AMLX,PANW,CAKE,DCO,MCS,MBX

Here’s The Complete List (.CSV and TeleChart Watchlist):

Read more

Some Random Thoughts

We’re back below 100 this week. In spite of the S&P breaking out, there’s not a tremendous amount of new momentum to be found. This might help to explain why the Russell 2000 and the Nasdaq remain range-bound below their all-time highs. As mentioned recently, prior “exciting” leaders like Semiconductors are no longer making the list. Some less exciting areas, like Banks-Regional (+2), have been making the list, but others, like REITs (-3), Medical Care Plans (-1), and Health Information Services (-1), are losing slots. Biotech continues to hold the most slots (23), losing one slot for the week. There has been some churning here, but based on the recent breakout, they have mostly been replaced with newer stocks within the sector. It is important for them to continue to make new highs. Notice in the IBB chart below that they are currently bumping up against their old highs. Oil & Gas hold the second most slots (10). If the strength continues in Energies, we could see more stocks soon. However, Refiners (-1) could lose slots since their pricing is less tied to higher energy costs. Software overall holds the third most slots (8), gaining one for the week. There’s still a lot of “one-offs” and “two-offs” in the list. For now, it appears that this isn’t broadening action but more reflective of “pockets” of strength. Obviously, I’ll pay attention to see if new sectors begin to emerge as leaders.

Biotech, basis the IBB, is just off its all-time highs. Ideally though, we’d like to see it break out and keep on going for a while.

Here’s The Sector Breakdown:

Surprises (Still) Tend To Happen In The Direction Of The Trend

If you’ve been following here on Substack and X, you’ll notice a recurring theme is “surprises tend to happen in the direction of the trend.” Surprises are still moslty happening in the direction of the trend (e.g., recently LFST and CLMT), but there have been some “debacle de jours” (scroll down to closed trades). Also, see my YouTube Channel for Dave Landry’s The Week In Charts for more on this.

Closed “Trades”

“Ride your winners and cut your losses short" remains the mantra for momentum trading. This week, most of the stocks closed out at losses/small gains were recent additions. This is the normal “ebb & flow” when “jockeying for position.” The idea is to keep chipping away at it until big winners are caught and ridden for a very long time. The fact that there isn’t much follow-through in the newer issues suggests that momentum could be waning. If this continues, we’ll likely end up with more cash “slots” (far less than 100 stocks).

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The Top 10 Gainers Since Added

Again, ride your winners and cut your losses short is the mantra. Notice that the biggest winners have been on the list the longest. Once again, the list isn’t quite as impressive as it has been earlier this year. Again, this is because many large gainers have recently lost momentum and have subsequently been removed.

The Stocks

Here are the top 10 gainers:

SYRE,TXG,TWST,CAKE,ATEX,PANW,LQDA,DCO,ZTG,MBX

Here’s The Complete List (.CSV and TeleChart Watchlist):

Read more

Some Random Thoughts

We’re at an interesting juncture. Prior “exciting” leaders like Semiconductors are no longer making the list. Biotechnology would be another example here. Although they still have the most slots (24), they also lost the most slots (-6). Less exciting areas like Banks (+3) and Oil & Gas - Refining & Marketing (+1) continue to gain slots. What’s even more interesting is how fluid the situation has become. Last week, the Nasdaq appeared to be rolling over, and the S&P was at multi-month lows. Just one week later, the S&P is breaking out to all-time highs (scroll down) and the Nasdaq is coming back with a vengeance. Stay tuned!

Notice the $SPX was making multi-month lows just last week but has since recovered to break out to all-time highs.

Here’s The Sector Breakdown:

Surprises (Still) Tend To Happen In The Direction Of The Trend

If you’ve been following here on Substack and X, you’ll notice a recurring theme is “surprises tend to happen in the direction of the trend.” For example, recently added AMLX is breaking out with vigor (up nearly 10% on 08/04/25 mid-day) to all-time highs.

Closed “Trades”

“Ride your winners and cut your losses short" remains the mantra for momentum trading. Once again, notice below that many of the stocks were closed out as losses (and small gains on stocks that have lost momentum) were relatively new additions. Conversely, the bigger winners: DELL 108%, BTSG 85%, and CLYM 66% were in the list much longer.

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The Top 10 Gainers Since Added

Again, ride your winners and cut your losses short is the mantra. Notice that the biggest winners have been on the list the longest. Once again, the list isn’t quite as impressive as it has been lately. This is because many large gainers have recently lost momentum and have subsequently been removed. For example, DELL, which was on “probation” last week, was removed (see above) for a 108% gain. The idea is to keep “chipping away at it” until large gainers are “caught” and rode for as long as possible (e.g., WDC, which was in the list for nearly a year, was removed on 07/07/26 for a 576% gain). Note: I have recently started “archiving” these updates so that you can see how momentum works.

The Stocks

Here are the top 10 gainers:

SYRE,ATEX,CAKE,PANW,MCS,LQDA,TXG,DCO,MBX,TWST

Here’s The Complete List (.CSV and TeleChart Watchlist):

Read more

Some Random Thoughts

07/28/26

The Landry 99

Although it “bounced” back to 100 intra-week, we’re back to 99 stocks. Remember, cash is treated as an asset class. When there are not enough meaningful stocks to fill the slots removed, a “cash position” will take its place. Also, (again) should the choppy conditions continue, we might need to drop the 52-week high down to 90 days or so. For now, we will leave things as is to see if we can replace the majority of stocks removed.

The sector rotation continues. Semiconductors, which fairly recently held the most slots, now have none. Since the last update, the SMH (scroll down) has bowtied to the downside (10SMA<20EMA<30EMA). FWIW, the Trading Service is short INTC from 96 (see the archives for more details here). We’ll likely short more Semis on a bounce. Biotech continues to hold the most slots (24), but unfortunately, once again, lost the most slots for the week (-4). Software-Infrastructure came in second for losing the most slots (-3). This action reflects the loss of momentum in technology in general; XLK and the Nasdaq have both Bowtied to the downside. Oil Refinery & Marketing continues to gain slots (+1). It remains one of the strongest sectors. Once again, there are a lot of sectors with only one or two slots. This action continues to reflect a general lack of leadership. Also of note is the fact that there are a lot less exciting (than Technology) sectors like REITs, Retail, Healthcare, and Leisure on the list. When old stocks are replaced, higher volatility stocks are given precedence. And, stocks with higher volatility readings tend to be in areas like Technology (see this article for more on how the list is created). Ideally, you’d like to see a bull market fueled by some “promise of the future” like Technology vs. Banks.

Here are the Semiconductors (SMH):

Here’s The Sector Breakdown:

Surprises (Still) Tend To Happen In The Direction Of The Trend

Even with momentum slowing overall, “surprises (still) tend to happen in the direction of the trend.” Notice recently added KNSA is up 24% today (as of around 1:00 PM EDT). I often show these as they occur (along with other insight) here on Substack and X, so make sure that you are following me!

Closed “Trades”

“Ride your winners and cut your losses short" remains the mantra for momentum trading. Once again, notice below that many of the stocks were closed out as losses (and small gains on stocks that have lost momentum) were relatively new additions.

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The Top 10 Gainers Since Added

Again, ride your winners and cut your losses short is the mantra. Notice that the biggest winners have been on the list the longest. Once again, the list isn’t quite as impressive as it has been lately. This is because many large gainers have lost momentum and have subsequently been removed. For example, DELL (+123%) has lost momentum and is now on “probation.”

The Stocks

Here are the top 10 gainers:

BTSG,DELL,SYRE,CLYM,ATEX,TXG,LQDA,MRVI,SLS,DCO

Here’s The Complete List (.CSV and TeleChart Watchlist):

Read more

For reference, the following was originally published in my 06/05/26 Newsletter. You can find the latest Newsletter here.

Random Thoughts

I Bet You Want To Party With Me

The best trading books tend to be the oldest.

I used to stay up long after Marcy went to bed on Saturday nights (now I just go to bed!), searching eBay’s antiquarian book section for books related to trading.

When the packages would arrive, Marcy would joke, “Oh, did drunk Dave send you another book?” When we were in the midst of moving, it became more of “Seriously, another book to move?”

Where was I? Oh, yeah, occasionally I’d find a gem like “Viewpoints Of A Commodity Trader” by Roy Longstreet.

Subordinate Thy Will

“The deepest secret for the trader is to subordinate his will to the will of the market. The market is the truth in that it reflects accurately all the forces that bear upon it. As long as he recognizes this, he is safe. When he ignores it, he is lost.”
Roy Longstreet

Like all my old books, there’s a lot to unpack there.

Life’s A Fight

First, Roy’s right. In markets, you win by giving in. This goes completely against human nature. Life’s a fight. Our entire existence is a fight. In caveman times, the fight was to find something to eat while avoiding being eaten, often by the very thing they hoped to eat.

In modern times, “the fight” may be different, but it’s still a fight. You fight for what you believe is right. You fight for higher pay/business success. You fight for your family. And, if you’re from the 1900s like me, “You’ve got to fight for your right to party.” Although now, as I get older, the fight is often to avoid parties.

All The Forces That Bear Upon It

Friend and fund Manager Dick Fruth got his start in a small brokerage. Back then, customers still held actual shares of their stocks. Dick said the curmudgeons in the office would tend to snatch the shares away from the client, write them a check, and send them on their way. Dick, being a little more gregarious, would sit them down and chat them up a bit. He’d always ask, Why are you selling?

“I’m getting married!”

“I’m getting divorced, and she hired a great lawyer!”
“I’m buying a house.”
“I’m retiring.”
“We’re having a baby!”
“I need money to cover some unexpected expenses.”

Rarely did their reasons have anything to do with the actual company.
Dick learned early on that people buy and sell stocks for a variety of reasons.

Those People Will Screw You

Tom McClellan gave an excellent speech at the American Association Of Professional Technical Analysts Conference (New Orleans, 2014). He explained that when you buy a stock, you form a relationship between you and the company. You expect that the company will have your best interests in mind. And, sans a few occasional “bad apples” (CEOs cooking the books or chasing their secretary around the desk,”it” happens!), they usually do. However, you’re also forming a relationship with all those who bought the stock prior to you. And, quoting Tom: “Those people will screw you.”

Everyone Uses Timing

Tom’s right. Never forget that you’re trading traders, not markets.

Since I began quoting Tom often, I emailed him to thank him for the quote. He replied:

‘As for quotes, here is another one from my late mother, Marian, regarding market timing:

“Everyone uses timing in their investing. Some people buy when they have money, and sell when they need money, while others use methods that are more sophisticated.”’
Marian McClellan

The Truth

Price is the truth. There are two, and only two, factors that affect the markets. Supply (selling) and demand (buying). Paraphrasing Greg Morris, fundamental analysis (and other financial theories) suggests what a stock should do. The price is what the stock IS doing.

“The market (price) is the truth in that it reflects accurately all of the forces that bear upon it.”

What Are The Forces?

Right now, speculation has run rampant. I work out in a small neighborhood gym. The gym participates in the “Silver Sneaker” program. Silver Sneakers pays for a gym membership for participating seniors. So, there are usually a lot of older folk in there (at least when I go). Anyway, one of my gym friends, “John” (87), recently told me that since he’s been stuck at home taking care of his wife lately (recent medical incident), he started day trading (BTW, you have my permission to shoot me in the head if I’m day trading at 87). This morning, he stopped to tell me that he’s buying SpaceX pre-IPO. Our discussion was brief because he had to run to “catch the open.”

John’s likely microcosm of what’s out there now. The factors bearing upon the market now are FOMO. The market’s irrational, but as Keynes says, “Markets can stay irrational a lot longer than you can stay solvent.”

Paraphrasing Mr. Longstreet: As long as you recognize prices reflect the underlying forces, you are safe. When you ignore it, you are lost.

Now, keep in mind that the “underlying forces,” the market participants, are constantly changing. I’d imagine that the first sizable sell-off (maybe today, Friday 06/05/26) would knock out the Johnny-come-latelies. These players have very little staying power mentally or monetarily. A sizable sell-off would also likely attract some eager shorts who tend to ignore Mr. Keynes and “confuse the issue with facts” (many of the high-priced stocks have little or no fundamentals). This action could create the mother-of-all “Trend Knockout” (TKO) moves. It’s what happens next that’ll be important. If the market resumes its uptrend, those knocked out will have to “put up or shut up” (i.e., jump back in), and the shorts will be squeezed. Notice that I said “if” the market resumes its uptrend. If this scenario plays out, make sure that you wait for entries. Speaking of which, I discussed waiting for entries in this week’s Dave Landry’s The Week In Charts. Check it out below.

TLDR;

Trading goes against human nature. You didn’t get to where you are by accepting everything as is. In markets, though, you win by “subordinating your will.” Accept what the market IS doing and act accordingly.

Also, keep an eye out for a TKO!

May the trend be with you!

Dave Landry

Random Thoughts

by Dave Landry

Inspired by Scott Adams’ book, How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life, recently, I began making affirmations. I soon discovered that affirmations must be backed with action. What will you do, “in return?”

What started as a simple affirmation-“I would like a sh*t ton of money”-has morphed into my mission statement. Although I wrote this only a few short weeks ago, I’m amazed by the results so far. I decided to share it with you for selfish and not-so-selfish reasons. One, I think you can benefit from my mission statement directly (or, ideally, make your own!), and two, a public declaration forces me to practice what I preach. My sharing is also inspired by the “radical transparency” discussed in Dalio’s Principles. I plan on making more and more public declarations.

Here’s the trading-related excerpt from my mission statement:

I, Dave Landry, will have a liquid net worth of a slightly absurd amount¹ in 2024. In return, I will trade the best and leave the rest OGRe² and trend trades, even if that means occasionally watching a mediocre setup take off without me. I will plan the trade and trade the plan. I will review my plan, the Landry List, my Landry 100 momentum list, IPOs, and Trading Service spreadsheet before, during, and after the open. I will utilize alerts and hard orders to get me in/take me out of stocks. Before each and every trade, especially those that were not part of the original plan, I will read my 3x5 (trader’s journal) bookmark card.

Further into my mission statement, I cover what I intend to do from a business standpoint. I’m not going to reveal that now in case my competition is reading (I actually don’t think I have any competition because I’m selling trading reality and not-and I quote: “Make 10-million in just 10-minutes a day.”) There is one thing that I will share, which dovetails into this Random Thoughts:

“I will read daily to improve myself on a personal, business, and trading level. I will put into action these things and not just read them once.”

Breaking It Down

Affirmations, Attractions, and Small Actions

Scott Adams talked about making affirmations and having those affirmations come true. Inspired, I figured it couldn’t hurt to start making some. And, do you know what happened? Absolutely nothing. This had me questioning if affirmations could work, but I kept the faith. In doing so, I found that my mindset toward the affirmations was positive when I thought about them throughout the day. They created “attractions.” Sometimes unknowingly, I made small moves that moved me closer to achieving the affirmations. These were seemingly meaningless little things like checking my junk email, something I haven’t done in years. To my surprise, there was an email in there regarding a business deal that I assumed was DOA. This deal made one of my first affirmations come true. This was an eye-opener for me and a little scary, too. Be careful what you wish for because it just might come true.

Over the coming months, the affirmations spawned off more and more attractions. Some of these were conscious efforts (e.g., checking spam more often), and others seem to be pure coincidence. For example, during the move, most of my books remained packed away or in storage. There were two in my nightstand drawer that stayed during the move. One was a Russian version of Dave Landry On Swing Trading (click here for a free English copy), which had ended up there after a hasty unpacking from a speaking engagement years prior. The other one was Think And Grow Rich by Napoleon Hill. Since I can’t read Russian and already know how the story ends, I opted for Hill’s book. I had read this classic years ago and figured that it would be a good idea to keep something positive in my nightstand for sleepless nights. In spite of my good intentions, it remained buried in the drawer for years, until now.

Early in the book, like Adams, Hill talks about affirmations. What struck a chord with me was that Hill discusses what you will do “in return” to make your dreams come true. This is how I came up with a plan to improve my trading and help meet my 2024 goal. These were not some sort of earth-shattering feats, such as discovering a Holy Grail, but rather, little “in return” affirmations that would help me follow the proper process. Note: on a re-skim of Adams’ book, he also talks about taking action vs. just dreaming. For instance: “If you want success, figure out the price, then pay it” (this is exhibit A on what good are dusty books?,keep reading).

You Want To Make A Big Change In Your Life? Make A Little Change³

John Wooden

“When you improve a little each day, eventually big things occur...”

So, you come up with your big dream affirmation. You’re gung-ho! You start making drastic changes. You might initially have some success, but I can all but guarantee that you’ll end up right where you started, or worse.

Homeostasis keeps us alive. It also puts the brakes on abrupt change. Unbeknownst to you, your body, specifically, the primal part of your brain, is going to fight drastic changes. And, eventually, it will win. For example, many of the “Biggest Losers” have since become the biggest gainers, fatter than they were when they started the competition. As an example closer to home, we have friends who are a blast to hang out with, unless they are on one of their tri-annual fad diets. We’ll have ‘em over, and they are boring, depressed, peckish, cranky, crotchety, and several other lame adjectives. Then, a few weeks later, we’ll notice in our Facebook feeds that they are partying like rock stars with some of their long-lost friends. The cycle then rinses and repeats. We now ask if they are on a diet before inviting them over, but I digress.

My point is that you can’t shock the system. You can make gradual changes to avoid setting off any alarms up there, a Kaizen approach, if you will. You have to “tiptoe past the panic monster.⁴” Drastic changes won’t likely help you achieve your dreams, but gradual ones will. Knowing this, I began making micro-affirmations for my “in return.” If you’re going to dream, you might as well dream big. Make absurd affirmations! Just make sure that you make a plethora of minor affirmations. These micro-affirmations are the conduits that get you there.

Let’s Take A Look At My “Conduits”

Pick The Best, Leave The Rest-Walk Away And Be Okay

“I will trade the best and leave the rest, OGRe and trend trades, even if that means occasionally watching a mediocre setup take off without me.”

You’re thinking about a setup. Are you feeling “ho-hum” or “F-yeah?” Is it really worth putting your hard-earned capital into harm’s way, or could you walk away and be okay? Pay careful attention to your internal dialog. Is it “yeah baby!” or “yes, but..”

Watch your “buts.”

Play the trade out in your head. Time travel. Do a pre-mortem about how you’re going to feel in your trade post-mortem. If it stops out at a loss, would you feel like so what, it looked fantastic! That’s just part of the game! And, if I saw this same trade again, I would take it in a heartbeat. Or, would you feel like this dang thing wasn’t really that great? Continue to play it out in your head. Is the potential upside worth the potential downside, both mentally and monetarily? If you can’t stand it and feel that if you didn’t take this trade, you would regret it, then take the trade. However, anything less than an f-yeah!, you should pass. I know it’s cliché, but you must pick the best and leave the rest.

Ever get stopped on a trade and immediately shout: “I KNEW I shouldn’t have taken THAT trade?” Of course, we all have. The point is that losing on the trade wasn’t completely in hindsight. You knew going into the trade that it wasn’t an “F-yeah” trade. You had foresight in hindsight.

Proper stock selection is an art, but it can be taught. 80% of stock selection is simple things such as making sure the stock is persisting and accelerating in the intended direction, the pullback is deep enough (but not too deep)/the transition is an obvious one off of major lows (or highs for shorts), there’s no significant overhead supply (for longs), and the stock generally trades cleanly. Essentially, the things I point out week in and week out in the Week In Charts.

The other 20% will take some experience. You’ll have to learn from honest postmortems on losing trades. As Twain said: “Good judgement is the result of experience and experience the result of bad judgement.” You’ll also have to learn how to separate pure luck from skill on mediocre setups that took off. We all tend to believe that positive outcomes come from skill and negative outcomes come from bad luck. “Resulting” (Annie Duke) is judging decisions solely on their outcomes is dangerous. This is especially true in trading. The market often rewards bad behavior and punishes good behavior.

Separating luck from skill is a daunting task, but it can be done. Document your trades, document your life, and again, “watch your buts.”

“I will review my plan, the Landry List, and Trading Service spreadsheet before, during, and after the open.”

Over my career, I’ve received emails thanking me for great stock picks that, through distraction and losing focus, I’ve forgotten to take for myself. It’s great that someone was able to profit from my analysis, but that someone should also be me. And, with my style, the occasional big outlier is key. It can make the difference between a great month or even a great year versus a mediocre one. With all the shiny objects out there, along with business “fires,” maintaining focus is vitally important. Although I have built focus into my routine (e.g., setting up my monitors before the open), I still have to remain vigilant. A lot of my trading is done at or around the open. And, as Murphy would have it, the sh*t tends to “hit the fan” around 08:29:59 AM (I’m in Central time)-my website crashes, my wife sticks her head into my office to tell me about a plumbing problem, an accounting problem, or just wants to say goodbye for the day, and she’s looking extra hot. Some of the stuff that has happened, you can’t make up. As just one of many examples, years ago, it was options expiration, and I knew that I had to take advantage of the opening gaps. My dog came into the office and leaned against the on/off button on my trading computer. This was back when it took what seemed like an eternity to boot a PC (I’m from the 1900s). Arrg!

Safeguards have to be put into place to make sure that I don’t miss great opportunities and to protect “me from me.” These are simple little things like setting alerts to notify me when action is needed and, when possible, using hard orders to get me into or out of a stock. For instance, one of my general rules is to only enter a trade on a stop order. For potential longs, this means placing an order above the market. This has saved me from jumping in too early in many cases. I’m amazed at how many times my stop entry is never hit, often within a penny, on trades that I was very tempted to hit the bid. This is especially true in something like opening gap reversal (OGRe) trading, where it’s very easy to get caught up in the euphoria. Other times, on position trades, I’ve received fill notices for stocks I might otherwise have overlooked. Occasionally, I’ll notice that I’m having a great day even though my stocks aren’t doing so well. Puzzled, I pull up my portfolio to find that it was a new stock that was providing the day’s gains, one that I could have easily forgotten about since it didn’t trigger around the open.

Again, you have to remain vigilant. Case in point: Before I wrote the trading portion of my mission statement, I had placed orders for eight consecutive days for a stock I recommended. On the ninth day, I figured that it had no chance of triggering, so I didn’t bother with the few clicks it would take to resubmit my orders. Luckily, I got a notice from my Facebook group peeps that it was triggering. I scrambled to get my orders in and only had to “pay up” a few cents. The stock rallied 60% that same day. I nearly missed it. Although I was relieved, I found myself feeling the psychological impact of nearly missing the trade, sort of the same feeling you get when you have a near-miss in traffic. You feel grateful that you’re okay, but the “what ifs” swim around in your head.

Another tiny affirmation, or so-called “commitment device,” is to simply read my 3 x 5 bookmark in my trading journal before each trade, especially if that trade is unplanned or could not have been planned in advance (e.g., an OGRe). I’m amazed at how this has kept me out of a lot of trouble. Just yesterday, I was super tempted to jump in on a late-day reversal in bonds. I read my card over and over and decided I must walk away and that I would be okay.

As I compose this prose, I’m wondering if I’m coming across as someone who doesn’t have it all figured out and struggles with trading. Well, like everyone (except for those guys who pose in front of rented private jets...can you hear me rolling my eyes?), I don’t have all the answers, and I do often struggle. In general, though, I do feel that I know what I should do. “Should” is the keyword in that sentence. One of my minor epiphanies, as discussed in this Week In Charts, is that trading is so dang easy when I just let the market come to me. “When” is the keyword in that sentence.

As also discussed in the Week In Charts, I have a big ego, and I’m not very agreeable. These are two bad traits for trading. I know that I must continuously work to protect myself from myself. One other point (hey, what do you expect when the name of the column is random thoughts?), when I do feel like I have the best of the best trades, even if I lose in a trade, I’m pretty good at shouting next, knowing that I did my best. Yes, I might drop an F-bomb, but I quickly move on, knowing that it was just part of the process and knowing that with the loser out of the way, I’m one step closer to the next winners. Conversely, off-the-cuff unplanned trades, while exciting, lead to the most angst. I’m still mad at myself for some stupid things that I did months ago. I know that I got a little too full of myself and pushed the envelope. Had I had my bookmark reminder, I wonder if I would’ve still gotten myself into trouble? What would the world be without hypothetical questions? (Wright)

Reading a card before each trade doesn’t sound like that big of a deal, but it is. Not to go all-freshman neurology on you, but the few seconds it takes to read the card is enough to bypass the small emotional part of your brain to get to the rest of what is sloshing around up there. The aforementioned tiptoeing past the panic monster, if you will. As mentioned often, the next time you want to make a quick barbed quip back at your spouse or significant other, don’t! (don’t worry, I’m not going to make the “you probably shouldn’t be trading if you have both” joke). Count to three instead. More often than not, you won’t say something that you can’t take back. You’re welcome.

Read And Act!

“I will read daily to improve myself on a personal, business, and trading level. I will put into action these things and not just read them once.”

The “in return” is key. Take some action. I have a metric sh*t ton of books here that I’ve read, underlined, earmarked, and placed back on the shelf (or still remain boxed). They have been collecting dust for years. Adding Hill’s thoughts about “in return” to my affirmations has gotten me thinking. How much more productive would I be if I put some of these things into action?

Again, affirmations seem to create attractions, some obvious and some coincidental. For example, as I’m finishing up this column, my wife got a hankering for some Chinese food. Below is my fortune.

In Conclusion

So, there’s my trading mission statement. Feel free to take what you like. Dream and dream big. Create your affirmations, but make sure you take action. Affirmations without action are just pipe dreams. The actions don’t have to be drastic changes. It’s better if they aren’t. Come up with your own small changes to achieve your goals. Dream big, act small.

May The Trend Be With You!

Dave Landry

Notes And References

1. Obviously, I have an exact amount in mind, but I want to avoid friends and family tracking me down in 2024 for loans. I’m half kidding. Seriously, it should be large enough that, if achieved, you’ll know all the little actions you took really did pay off. You must be specific. You need to have an exact amount in mind. You also need a date. A goal without a deadline is just a dream.

2. Opening Gap Reversals. A trade in which you look to capitalize on an overnight overreaction. This is covered in detail in the learning management system and occasionally in the Week In Charts, such as this one. Also, see this YouTube Playlist.

3. Inspiration here and Wooden quote comes from The Kaizen Way: One

Small Step Can Change Your Life by Dr. Robert Maurer. A book that I would urge you to read. See www.davelandry.com/books-to-read

4. From The Kaizen Way: “tiptoe past your fears” combined with the “Panic Monster” from waitbutwhy (Youtube and Waitbutwhy.com)

Most traders, especially novices, are “setup junkies.” Early in our careers, we search for the Holy Grail. We think that if only we could find the perfect setup, we would become rich. This action has us trying lots of different things, which can be quite expensive. It also takes its toll mentally. Mixed success with many setups can be exhausting. The irony is that most eventually stumble onto something quite viable, but are all too quick to abandon it when, not if, it no longer seems to be working. This puts the trader back into searching mode. The cycle continues until the wannabe trader either gives up or settles for something simple. Soon-to-be successful traders realize that there is no Holy Grail and that something simple can work, not all the time, but over time.

Just ONE Pattern

“All you need is one pattern to be successful.”

Linda Raschke

Linda’s right. The next time you find yourself plotting the 14ᵗʰ oscillator, or trying to determine if the wave count is the fifth (5^th) of a third (3^rd) or a third (3^rd) of a fifth (5^th), ask yourself, “Is the market going up, down, or sideways?” If it’s going up, then you should be looking to buy. If it’s going down, then you should be exiting (or possibly looking to short). And, if it is going sideways, then you should be out of the market. All you need is ONE viable setup to help you achieve this goal. And know this: if you’re not successful with one setup, you won’t be successful with a dozen.

Be A Lover

Never forget that the only way to make money trading is to sell higher than you buy (or cover lower than you shorted). Said alternatively, you must capture a trend. And the BEST way to capture a trend is through trend following.

To follow a trend, you must first have a trend to follow. Although this is a bit “Captain Obvious,” many buy range-bound markets, hoping that a trend will develop. Even worse, some try to outsmart a market by fighting an established trend, hoping for a trend reversal. Leo Melamed, former chairman emeritus of the CME Group, said it THE best:

“Be a lover, not a fighter.” (of trends)

“Illustrators”

Before we discuss Landry Light, know this:

Despite what a guru trying to sell you an indicator might tell you, indicators do not “indicate.” Being a derivative of price, they follow price action. Although they don’t indicate, they can help to “illustrate” what’s happening (e.g., gauge strength). Always study the price carefully, regardless of what any indicator suggests. The “net net” price movement is your best friend here. Is the market higher, lower, or about the same as it was days, weeks, or months ago?

Notice in the S&P 500 (chart 1), the “net net” price movement was negative (a) from late February 2025 until April, positive(b) from April to October. And, flat to negative (c) since October.

Chart 1

Landry Light

Next to “eyeballing” a chart for “net net” price movement, one of THE best and simplest ways to determine trend is with Landry Light. Landry Light is simply a count of the number of lows greater than the moving average for uptrends and the number of highs less than the moving average for downtrends. The count resets to zero when the price touches the moving average. The algorithm for the Landry Light (LL) formula is really quite simple:

LL = 0;

MA = 30 Day EMA; {or your favorite moving average}

For each bar:

If low > MA Then LL = LL + 1;

If high < MA Then LL = LL - 1;

If price intersects the MA, Then LL= 0;

NOTE: Landry Light is built into some popular charting packages, such as Metastock and StockCharts ACP.

Chart 2 is the same as Chart 1 with the addition of a 30-day EMA and Landry Light. Notice that the February to April slide (a) had downside Landry Light (red, highs < the moving average) and the subsequent major rally (b) had mostly upside Landry Light (green, most lows > the moving average) with a few “kisses” of the 30-ema (no Landry Light after an extended period of upside Landry Light, a pattern that we will use to our advantage, keep reading), and alternating back and forth between green and red since (c), suggesting a sideways choppy market.

So, What’s The ONE Pattern?

Getting back to Linda’s “one pattern,” the question is: So, what’s THE ONE pattern?

When I look back to my biggest winning trades, I’m amazed that most were Landry Light Pullbacks (using a 30-day EMA). They might also be other patterns that I trade (e.g., Trend Knockouts), but again, most were Landry Light Pullbacks. And, most of the ones that were not, were Landry Light Pullbacks with a shorter-term moving average (e. g. a 20-day EMA vs. a 30, keep reading).

Considering the above, I strongly believe that Landry Light Pullbacks could be THE ONE pattern.

The Rules

Landry Light Pullbacks

1. The stock should have 10-20 bars of upside Landry Light (total). Further, the trend should be obvious based on “net net” price movement and ideally have persistence and acceleration.

2. The stock should pull back to “kiss¹“ the moving average (Landry Light is now zero).

3. Enter above the recent highs to help avoid being triggered by noise alone.

4. Practice proper money management. I use a hybrid money management approach where a protective stop is placed well outside of the normal noise of the market, an initial profit target (exit half of the position) is set at 1x risk: entry + (entry – protective stop), and a trailing stop is then gradually loosened on favorable moves in an attempt to ride out a longer-term trend on the remainder. See Notes and References for more information on money & position management, including years of examples.

Let’s look at some examples:

1. Kratos Defense & Security Solutions, Inc. (KTOS) had 28 days of upside Landry Light. It also had only upside Landry Light 21 days prior to that (49 days total). This suggests that the stock is in a longer-term uptrend. Looking at the chart, it has made a significant move higher on a “net net” basis during this time period.

2. KTOS pulls back to “kiss” the moving average. Landry Light is now zero.

3. Look to enter above recent highs to help avoid being triggered by noise alone. Here are the parameters that I used (along with other stocks recommended on 06/25/25), based on the 100k model account²:

4. Practice proper money management by using a protective stop (a), taking partial profits (exit half of the position) at 1x the initial risk (entry + (entry – stop)) (b), (c) use a gradually widening trailing stop³ (on favorable moves) in an attempt to ride out a long-term trend, and (d) honor the stop when eventually hit.

1. Kinross Gold Corp. (KGC) had 22-days of upside Landry Light. It also had 16-days of upside Landry Light (and no downside Landry Light) previously. Looking at the chart, it has made a significant move higher on a “net net” basis during this time period.

2. KGC pulls back to “kiss” the moving average. Landry Light is now zero. The parameters for the trade were as follows:

3. Look to enter above recent highs (in this case, $14.50) to help avoid being triggered by noise alone. NOTE: There was some downside Landry Light before the trigger was hit. However, the longer-term trend was still in place. If the stock had continued lower before triggering, the setup would have been ignored. Always wait for an entry.

4. Practice proper money management by using a protective stop (a), taking partial profits at 1x the initial risk (entry + (entry – stop)) (b), (c) using a widening trailing stop in an attempt to ride out a long-term trend, and (d) honoring the stop when it is eventually hit

1. American Xtal Technology (AXTI) had 64-days of upside Landry Light. Before that, it had 36-days of upside Landry Light. That makes 100 days total of upside Landry Light with no downside Landry Light. Note: Those with a good eye will notice that the stock was set up as a Landry Light Pullback previously (October 2025).

2. AXTI pulls back to “kiss” the moving average. Landry Light is now zero. The parameters for the trade were as follows:

3. Look to enter above recent highs (in this case, $20.60) to help avoid being triggered by noise alone. NOTE: There was some downside Landry Light before the trigger was hit. However, the longer-term trend was still in place. If the stock had continued lower before triggering, the setup would have been ignored. Always wait for an entry.

4. Practice proper money management by using a protective stop (a), taking partial profits at 1x the initial risk (entry + (entry – stop)) (b), (c) using a widening trailing stop in an attempt to ride out a long-term trend, and (d) honoring the stop when it is eventually hit.

A Setup Is A Setup?

In the mid-1990s, I worked with traders and hedge funds to program and research mechanical systems. For one trader, my job was to run and maintain scans. I assumed that most of the work would be clerical: run the scans and report my findings. However, I quickly realized that the trader also wanted me to assist in the stock selection process. Back then, I was more mechanically oriented. I assumed that if a setup checked all the boxes, it was viable. When I showed the trader one of his setups, he immediately said it wasn’t one of his. I then walked him through why the computer flagged it and how, in fact, it was. He then said, “ Okay, I hear you, but I still don’t like it.” At that point, it hit me. All setups aren’t created equally. Fortunately for me, the trader was willing to give me on-the-job training on how to pick the best setups.

Years of programming mechanical systems, along with working closely with a stock trader made me a discretionary trader. You must “pick the best and leave the rest.”

Picking The Best

Once you have a potential setup based on the rules, you must further qualify it as a candidate worth trading. Although it’s beyond the scope of this article to teach proper stock selection, at a minimum, there are several easy-to-identify factors to look for (see Notes and References for more research). In general, the stock should trade “cleanly.” This means it tends to move in one direction and doesn’t bounce around like an electrocardiogram. As mentioned above, the “net net” price change must be significant relative to the underlying volatility of the stock. The stock should also “persist” in its trend. Said alternatively, the stock tends to go up day after day. Persistency can be gauged by simply drawing a line through as many bars as possible. Mathematically, this is equivalent to linear regression. I prefer to keep things simple and just draw lines. Furthermore, it should also be accelerating before it pulls back.

Getting back to the AXTI example:

1. Notice that the stock made a significant move higher, gaining several hundred percent.

2. During this time, it traded “cleanly.” It tended to go mostly higher in a somewhat orderly fashion. Further, the trend was very persistent.

3. The stock accelerated higher before pulling back to complete the setup.

In addition to qualifying a setup, you must also consider market and underlying sector conditions. Ideally, the stock, the overall market, and the underlying sector should all be trending higher. Conducive conditions help to give you some “tailwind.” If you’re new to the setup, only take those in agreement with the general conditions. If you’re more experienced, only take a setup if you feel that it’s such a great setup that it can trade contra to the overall market.

Do Your Due Diligence

Years ago, I was speaking with a trader friend. He told me that he just bought a stock based on a specific setup. Curious, I asked how long he had been trading that setup. He said, “Oh, I just read about it earlier this morning.” Obviously, he did not do his due diligence.

Before trading anyone’s setup, make sure that you study it very carefully. Find numerous examples (see Notes and References). Find some that worked and find some that failed miserably. Get a feel for what makes the best setups. Study the setup until you feel confident that, although it doesn’t work all the time, it can work over time, especially in great conditions.

In Summary

Trading is far from easy, but not nearly as difficult as many try to make it. Simple setups can work quite well. Linda’s right. “All you need is one pattern to be successful.” Landry Light Pullbacks could be that one pattern. Study this setup (and any other setup you might consider) carefully to fully understand it, both good and bad.

Notes and References:

1. In my book The Layman’s Guide To Trading Stocks, Landry Light Pullbacks were called “Kiss MA Goodbye” (and used a 20-day EMA vs. a 30-day EMA). The book can be downloaded for free here: http://www.davelandry.com/free-book/

2. The model account is based on a hypothetical $100k account. The risk per trade is 2% ($100,000 * 2% = $2,000) if stopped out. The number of shares to trade is calculated by dividing the risk ($2,000) by the stop distance. Although the model is hypothetical, I do take all trades recommended in a model account and in other personal accounts.

3. See my website www.davelandry.com for lessons on my hybrid money & position management method and Trading Service Archives (below) and YouTube Channel (below) for “walk-throughs.”

4. The setups shown in this article were taken directly from my Trading Service archives: www.davelandry.com/archives. More recent services (less than 1 week old) and the live portfolio can be found on my YouTube channel: www.youtube.com/davelandry I would encourage you to study as many of my recommendations as possible. Notice what worked and what didn’t.

Based on the interactions during my weekly Chart Show, it seems that waiting for trends is creating some performance anxiety out there. “Cash is trash!” was one of the statements made. Relax. Cash is not trash. That’s a cutesy saying, but it simply isn’t true. Things that rhyme are more likely to be believed, whether they are true or not. Exhibit A: “If the glove doesn’t fit, you must acquit.”(1) It’s okay to sit on your hands—and cash. Sometimes the return of capital is better than the return on capital.

“There’s Got To Be Somewhere That I Can Park My Cash !?”

Well, I’m not going to spend my time trying to chase a .000015% yield vs. a .00001% yield (although they have risen a bit since this article was originally published). There’s plenty out there doing that. And, God bless ‘em for their hard work. I’d rather focus my energies on the next big opportunities, which will hopefully return many times that amount. Having the cash ready to pounce when those opportunities present themselves is a great position.

The longer I’m in this business, the more I realize there are no good long-term investments, despite the diatribes of snake-oil salesmen. Yes, something might have decent returns over a 50-80 year time horizon, but channeling Sweet Brown: “Ain’t nobody got time for that!” Further, what often happens in between is what kills you. Losing 50% to 80% of your investment can be devastating and demoralizing.

Wait, Big Dave, what about the “fact” that stocks always go up in the long term? Well, those metrics are based on an 81-year time horizon.(2) Look no further than the last two major bear markets. The S&P, peak-to-trough, lost over half of its value in ’00 and again in ’08. During the same timeframes, the Nasdaq lost 78% and 55% respectively. What about gold? Well, from the peak in 1980 it lost over 80% of its value over the next 20-years. And, in more recent times, it has lost nearly half of its value since the September 2011 high. Real estate? Well, we all know what has happened here over the past several decades. Yes, I think that everyone should own the roof over their heads (for numerous reasons), but other than that, it’s not a good longer-term investment.

During the ‘01/02 bear market, the Nasdaq lost over 78% of its value.

As I often preach, ALL asset classes will lose half of their value at some point in your lifetime. In my short lifetime, I’ve seen many “halves.”

Although gold is often touted as a “long-term investment,” it can occasionally lose 50-80% of its value.

One more thought: I recently watched a YouTube video of some young punk who is holding himself out there as a financial guru. He said that if you are young, you should buy and hold. That will work “until it don’t.” As I wrote in my Special Market Update, don’t take my word for ANY of this. Plot some charts. Sometimes it takes a decade or two (and a half!) for a market to recover.

Watch the video below and then take the Start and Market Timing Course to learn more about the dangers of “buy and hold:”

Longer-term Investing vs. Trading-Case Closed

So, that’s my short case for trading vs. investing. Now, “trading” doesn’t mean that I’m like the little rat hitting the button frantically for cocaine. I was asked in an interview on Wednesday about the length of my holding period. My reply, as always, was: “at least 10-years, hopefully much longer.” The reality is that the money and position management will take me out much sooner. I firmly believe that you can only predict the short-term with any degree of accuracy, but you can follow trends forever. I’m slotted as a swing trader, probably based on the title of my first two books, but I will stay with trends as long as they move in my favor. I use a stop in case I’m dead wrong. I take partial profits in case the move is only a short-lived one. And, I use a trailing stop just in case the trend lasts 10 years, or longer! Watch the video above and others (after you sign up you’ll get 2 free courses) for more on this.

May the trend be with you!

Dave Landry

P.S. Well, that’s my take on investing for the long-term. Leave a comment below to let me know what you think.

1. I learned this rhyme thing from a speech given by Tom McClellan: “Sell in May and go away” at the American Association Of Professional Technical Analysts meeting

2. Source: Greg Morris, Investing With The Trend

by Dave Landry

A while back, former multi-billion-dollar money manager Greg Morris met the gang at Traders Expo in New York for food and drinks to celebrate his birthday. After the obligatory jokes-which are best described as 8th-grade humor (at best), are out of the way, the conversation often turns toward the markets or aviation, and in this case, both. To those of you who don’t know Greg, in addition to running billions, here are a few highlights: he was previously the “Morris” part of MurphyMorris.com (John Murphy was the “Murphy” part, the site is now StockCharts.com), a fighter pilot (Top Gun, btw), and a commercial airline pilot. Sounds like someone who can’t hold a job to me! (his joke).

Anyway, I asked Greg if the items on the flight checklist were there because someone forgot to do them. And yes, he confirmed, for instance, that the reason for putting the landing gear down during landings is that someone forgot to do that. This got me thinking about a checklist for traders. Let’s explore this further.

Pre-trade Checklist

You’re much more likely to make an emotionally charged decision during the heat of battle. That’s because stress is at its highest when information is changing or uncertain.¹ Now, the only time that information is static is after the close. Therefore, you must plan while you’re in this relaxed state. I like to grab a big cup of coffee and go on my treasure hunt of sifting through thousands of charts looking for my next big winner.

Planning The Trade Checklist

Ask yourself....

• Does the stock tend to trade cleanly and not like an electrocardiogram?

• Is the stock in an obvious trend or an obvious emerging trend?

• Are there any big picture patterns—say a major double bottom or recent huge base that might suggest a bigger move could be in the works?

• Is there “clear air” above? (i.e., no overhead supply) Remember, if there a significant amount of trading above where you enter, those who bought in that area will likely be looking to bail out at breakeven. It’s human nature.

• Does the setup meet all the criteria? For instance, for a Trend Knockout (TKO) the knockout move must be a meaningful wide range bar down—enough to have likely shaken out some nervous nellies and attracted some egotistical shorts. Persistent Pullbacks must pull back after a persistent trend (I know, “duh” implied, but you’d be surprised how many people send me charts that have no trend whatsoever).

If The Stock Does Pass Muster....

• Is the representative sector also trending?

• Are stocks within the sector also trending? Sometimes, a few big-cap issues can cause an aberration in the sector as a whole. Therefore, the more supporting evidence, the better.

• Have you gone through all the tradable stocks within the sector to see if there are any sexy sisters (or brothers, depending on what you’re into)? Sometimes, a good setup might lead you to a great setup.

• Is the overall market headed in the intended direction, and if not, do you think you have either a) the mother-of-all setups or b) a stock that can trade contra to the market (e.g., occasionally a commodity stock or a speculative IPO)?

• Have you weighed all of the above against the potential of not taking any new action?

Ready, Set, Action?

The only reason to ever trade is to make money—and never for action. Not putting capital into harm’s way should always be considered. Many times, I’ll spend hours doing research that produces absolutely nothing actionable. That’s okay. As an ex-sailboat racer, I’ve been caught in many nasty storms, including a low-pressure system for 36 hours--and we were the smallest boat in the fleet! And, once, around 400 miles off the coast of Bermuda, we nearly sank as the biggest boat in the fleet. Size didn’t matter in this case, especially since there wasn’t room for all of us in the life raft. So, I can attest to the fact that “it’s better to be on the dock drinking beer wishing that you were out to sea than to be out to sea wishing you were on the dock.” As a pilot who has lost engines, I’m sure Greg can attest to the same thing about flying.

Now, it took me 14 hours to cover everything you need to know about stock selection. However, if you just check off the above, I can assure you that you’re well on your way. Come to a few chart shows and ask about your candidates (or to accelerate your learning curve, see below for a screaming deal!).

See It In Theory And Then See It In Practice: Buy The Stock Selection Course And Get 1-year Free To Dave Landry’s Trading Service

So, you have decided that you have a worthy candidate...

Plan your trade Checklist

• Do you know where exactly you will get in (your entry price)? And, is that entry far enough away from the closing price so that you’re not triggered by a false move (e.g., market manipulation-yes, “it” happens)?

• Do you know exactly where you will place your initial protective stop? And, is that stop outside of the normal volatility, so you won’t get stopped out on noise alone? Is it also at a level where you will obviously be wrong as a trend follower?

• Do you know how you will trail your protective stop before the initial profit target is hit (usually roughly 1-for-1).

• Have you mapped out a general plan for after the initial profit target is hit (e.g., allow it to gradually widen to make the transition to a longer-term trader).

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During The Trade Checklist

At dinner, Greg asked me about my plans for the following day. I told him that I was speaking for 4-hours. He then made the uptrend and downtrend motions with his arms and said “How are you going to speak about that for 4 hours?” My reply was-motioning my arm horizontally--“well, there’s also sideways!” I went on to say that in addition to trends I was going to cover setups and money management. Further, I was going to cover trading psychology—for instance, things like how sometimes, all it takes is a few second pause from a physiological standpoint to bypass the emotional part of your brain (the amygdala keep reading). He replied “Wind the clock.”-a reference from his excellent book (which doubles as a doorstop-his joke) “Investing With The Trend.”

Due to the potential to make emotionally charged decisions, we have to keep calm and follow the plan. In the aforementioned book, Greg said that “The absolute worst time to create or change a rule is when you are emotionally concerned about something that just seems to not be working correctly.” He gave the example of F-4 Phantom jet simulations back in the 70s. When faced with an emergency situation such as loss of oil pressure or an engine failure, many pilots, including himself, would flip the wrong switch or pull the wrong lever “during the emotional surge that comes with bright flashing lights and loud horns.” His solution for not repeating these mistakes became simple: Wind the clock (back then, there were analog instruments). The few seconds it took to wind the clock helped to “rid yourself of the adrenaline rush” and lead to clearer thinking.

Like all seasoned pilots, Greg has had a few “wind the clock” moments. He gave the example of once losing an engine. The co-pilot immediately wanted to shut the engine down. Greg, said no!, and after metaphorically winding the (now digital) clock, said to leave it on for now because you risk the chance of shutting down the good engine. He landed the plane, and no one was the wiser. Fortunately for Greg and those flying along with him, “he’s never put a scratch in an airplane.”

Don’t Wake The Panic Monster

Concept of Panic Monster borrowed from waitbutwhy.com

You have a little “Panic Monster” (aka the amygdala) inside your head. As I often say, the best way to avoid making emotionally charged decisions is to “tiptoe past the Panic Monster”², to avoid waking him. Here’s a little exercise for you. The next time you want to make an instant quip back at your spouse or significant other (who am I to judge but you probably shouldn’t have both, btw) just breathe! (or “wind your watch”) You’d be surprised at how often that will keep you out of trouble. You’re welcome! Now, applied to trading, just breathe.

The Only Five Things That You Should Be Doing

If you’re following my swing-to-intermediate-term (and hopefully much longer!) approach, there are only five things that you should ever be doing:

Do Nothing Unless The Market Is Doing One Of The Above 4 Things

• 1. Did the stock trigger an entry and if so, did you enter?

• 2. Did you place a protective stop once triggered?

• 3. Did the stock move in your favor (on a closing basis) and if so, did you trail your stop higher?

• 4. Did the stock hit your initial profit target and if so, did you take partial profits (half)?

• 5. If there’s not one of the 4 things above to do, are you doing nothing?

Now, if your more disciplined, there might be occasions—NOT EVERY DAY-where exercising a little discretion (e.g., surviving a stop nick by giving the position a SMALL amount of wiggle room, taking partial profits on a “close enough” near miss, etc..), in the above can greatly improve performance.

The Waiting Is The Hardest Part

source: TomPetty.com

Tom Petty got it right. The waiting is the hardest part. You’re a person of action--and seriously, if you weren’t, you wouldn’t be working to better yourself by reading this prose. And, as a person of action, waiting can be tough. You’re either waiting for setups or waiting for positions to do something. Waiting is tough, but patience is key. Again, if you are getting ready to take unnecessary action, just breathe or “wind the clock.”

I’m a big fan of symbolism. I have a “Sardine” Drive street sign proudly displayed over the door of my office. It serves as a constant reminder that I must believe in what I see and not in what I believe. And, it reminds me that I’m here to trade, not to interject logic, reasoning, or emotions into my trades. See this Random Thoughts for more on “trading sardines.” Anyway, inspired by Greg, I now keep a vintage aircraft clock on my desk (scored on Ebay). I literally wind the clock before clicking “confirm order.” As silly as this sounds, this has helped my trading. Case in point: While writing this original column, before the clock arrived, I “fat-fingered” an order. I’m sure that if I had taken a few seconds to confirm, I would have realized my mistake.

Checklist After The Trade

After the dust settles, it is a good time for reflection. Do an honest post-mortem and ask yourself:

• Did you really pick the best and leave the rest?—circle back to the pre-trade checklist. Yes, it’s in perfect hindsight, but at least you’ll be thinking clearly.

You’ll find that sometimes you’ll think “what the hell was I thinking?” That’s okay. That’s part of the positive feedback cycle. With time, you’ll find yourself asking that question less and less-one of the few things that I can guarantee.

Remember, “outcomes are noisy.” Bad trades can make money, and great trades can lose money. “Think like world-class professional bridge player Richard Zeckhauser who scores himself based not so much on whether he won the hand, but rather how well he played it.”³ Good traders are no different. They recognize proper procedure regardless of the outcome. You might want to write that down.

• Did you truly plan your trade ahead of time?

• Did you follow the plan?

Again, as a person of action, it’s hard not to do something when there’s nothing to do. Micromanagement is one of the biggest sins I see. And trust me, I’m not immune to the Siren call. We’re wired to avoid pain at all costs. It’s tough to watch a position head toward the stop and do nothing. On the flip side, it’s tough not to be tempted to mentally monetize gains and lock them in before they evaporate, especially if you’re coming off a string of losses. I think Mr. Lambert got it half right-doing nothing is MUCH harder than it looks.

In summary, we’re human and prone to making emotionally charged mistakes. Therefore, take a breath, wind the clock, and check your checklist. That might be all you need to keep you from winging it.

May the trend be with you!

After Thoughts

Autopilot From The Movie “Airplane”

As I edit this column, I began to think the best way to not put yourself into an emotionally charged situation is to avoid it in the first place. The more observations you make, the more likely you are to put yourself into a state of regret. “Be as close to the market as you need to be but no closer.” In other words, unless you need to be watching a screen, don’t! As Ed Sekoyta once said,“Having a quote machine is like having a slot machine at your desk – you end up feeding it all day long.” Let the market make decisions for you. You can use a stop order to trigger you into a position and then a hard stop (reset daily after the open for those using discretion) to keep you in or take you out of the position. Also, I’m not a huge fan of limit orders, but they can be set at the initial profit target as a “pay me” type of order. Sometimes, a quick spike might pay you while you’re off saving lives, building buildings, or doing other great things.

Your Thoughts?

Do you have a checklist for trading? Question, errors, omissions? Scroll down and leave me a comment. I read ALL personally and often reply.

References and Footnotes:

1. Montier, The Little Book of Behavioral Investing based on research from Gary Klein .

2. Concept borrowed from The Kaizen Way by Dr. Robert Maurer.

3. Poor Charlie’s Almanack: The Wit and Wisdom Of Charles T. Munger

We are all prone to making emotional mistakes. Check the following before making your next trade. Do this until it becomes second nature. The next time you are in a slump, re-read this and return to the basics.

1. Are market conditions favorable for your methodology at the moment?

For trend following, this means that the market has been trending and not trading sideways. Draw your arrows and apply the Rip Van Winkle “sleep test.”

Random Thoughts (RT): This means imagining you went to sleep for a long time. When you awoke, you checked the market prices and noticed they were relatively unchanged. This is the recurring “net net” issue that I often discuss. Many people claim to be trend followers but are often interested in stocks that have gone nowhere for weeks and even months. Come to the next Week In Charts, and you’ll observe this firsthand.

2. Are you following sound money management?

Remember, money management will cure a multitude of sins. It will keep you in the game until the sun shines on you and your methodology.

RT: There’s a saying in the South: “The sun doesn’t shine on the same dog’s ass every day.” As I’ve said ad nauseam, I’ve been criticized for saying that momentum trading can be “streaky.” Well, it is. You print money for a while, then you all too quickly go right back to grinding it out. Money management cures a multitude of sins by keeping your ego in check when the sun’s shining and mitigating the damage when it isn’t.

3. Have you lived through a variety of market conditions?

If you have only experienced a bull market, trust me, you do not know what it is like to be in a bear market. We are all human. It is impossible not to get excited when things are going well and depressed when things are not. Knowing that market conditions change can help temper these emotions.

RT: Well said, Big Dave!

4. Do you know your methodology?

Knowing that your methodology has the potential to stop you out numerous times before catching the mother-of-all trends makes it a lot easier to handle losses when they occur.

RT: As I often mention, I’ve had many clients over the years come in at the perfect time. They print money and quickly think they get it. This trading thing is “SO easy.” The Humphrey Neill quote “Don’t confuse brains with a bull market” comes to mind, but I’ve also seen people do amazing things in one-sided bear markets.

Ego-driven behavior begins to rear its ugly head. They soon fire me because they “get it, and want to do it all on their own.” I’m not saying that I’m all that and a bag of crisps nor implying that I’m the Grand Poombah. I’ve had my ass handed to me way more than I’m willing to admit. I’m just saying that I’ve been around the block a time or two and know that there will be good times and bad.

Conditions change, and the monetary and emotional fall often comes shortly thereafter. My favorite clients are those who have stuck it out through the good, bad, and indifferent times. They know that bad times often follow good. They keep me “on staff” to keep them on even keel-helping them to press (a little) in good times while keeping their egos in check and mostly sit on their hands in bad (i.e., to be patient). I also like clients who return after going off to chase empty promises and Holy Grails. They realize that there is no magical bullet-other than grinding it out in a “trading simplified” manner. I should trademark that. Wait, I did!

5. Are you straying from your methodology?

If you are trading my swing-to-intermediate method, then you should not be making numerous trades daily. You should not be buying markets because they are oversold or shorting them because they are overbought.

RT: I’ve “fixed” a few clients by dissecting their portfolio-removing their day trades, breakouts (other than in IPOs), reversal trades, and any other trades outside of the core methodology. What’s left is magically profitable. The “ah ha” epiphany that follows is usually more of a “I know, I know!” (keep reading)

The main secret to trading is that there is no secret. If there were, someone would have found it and there would be no more markets. There are “Trading Simplified” simple secrets such as doing just one thing. And, when the sun isn’t shining, you sit on your hands. You might want to write that down.

I once met a trader who claimed to be trading breakouts when the market was following through on breakouts and reversals when it wasn’t. No one is that good. I can all but guarantee that you’ll be perpetually out of phase if you try.

6. Have you been trying to outsmart the market?

Are you trying to get in early-i.e., before a trigger early and exiting at the
first minor signs of adversity? In other words, are you not following your plan?

RT: Well said Big Dave!

7. Do you even have a plan?

RT: It’s cliché to say plan your trade and trade your plan, but do you do it? Many don’t because the moment they plan is the exact moment that they have to accept the fact that they could be wrong. Now, suppose that you do plan your trade. Following the plan means accepting what the market gives or takes. It removes hope--and as humans, we’re not wired to be hopeless, otherwise, why bother?

8. Are you trading the best and leaving the rest?

RT: This is another one of those “come to the next Week In Charts, and I’ll show you what I mean” things. The same successful people, doctors, lawyers, and automatic transmission mechanics---who strive for perfection in life--often settle for mediocrity in the markets. After years of searching for why this is so, a client, who is a psychiatrist, explained it to me. In life, highly trained professionals don’t have the luxury of waiting for the ideal client. “...they have to take whatever train wreck comes along..”

9. Are you dealing with any major or not-so-major life events?

RT: Re-reading this one hits home. My father was recently diagnosed with Leukemia. It took his life within a few short weeks. On nearly the same weekend as my father’s diagnosis, my mother was diagnosed with Lymphoma. I’m now spending my time split between two offices, helping her in her battle three hours away, while trying to keep it all together at home-which includes downsizing from six+ acres with a guest house (my office) to something much smaller, maybe even a condo.

All of this is forcing me to look long and hard at each and every trade. Am I taking this trade to try to “fix” something in my personal life? Or is this a fantastic opportunity that must be taken? You know, even if things are going fairly well in your life, you might still want to ask yourself that question.

Follow-up: Six months and one day later, my mother joined my father. Our house sold after just one year on the market (sarcasm implied), and we moved into a rental while our new home is being built. The point is, there’s always something in your life that could distract you from your trading. As LR Thomas once said “Don’t expect trading to fill a hole in your life that’s missing.” And, unfortunately, there will always be a “hole.”

10. You know what you are doing wrong. What is it?

RT: I’ve made videos and have written extensively about this, both here, DaveLandry.com and in print. Provided that you’ve traded through a variety of conditions and know your methodology, then you know which of the above nine you’re violating. If not, ask me, and I bet that I can get you to say, “I know, I know!”

In Summary

We’re emotional beings, prone to making emotional mistakes. Embrace and accept this. Then, check this checklist before making your next trade.

May the trend be with you!

Dave Landry

By Dave Landry

I think about trading a lot. Even in my downtime, I constantly think about how simple, yet elusive, trading can be. When you boil it all down, you just have to sell higher than you buy. I know it's easier said than done, but that's it. Note: I didn't say "buy low and sell high"-that's a loser's game and fodder for many of my columns and presentations. Anyway, this thinking led me to an epiphany. Trading is really only two things:

1. Find A Viable System

2. Trade It

Number 1 isn’t easy, but it's much easier than number 2. A hedge fund manager once said that he could publish his system on the front page of the Wall Street Journal and it would not affect his fund’s performance. The reason is that people wouldn’t follow it. A while back, I was speaking at a trading conference in Germany. They couldn’t believe that this crazy American was showing them exactly what he does. Surely, there had to be more to it!

At DaveLandry.com, I preach and teach a viable methodology daily. One of my most frequent sermons is on patience. If there is a secret to trading, then that's it. Despite my ramblings on this, people try to make something happen in less-than-ideal conditions rather than sitting on their hands. They try to get in early to "beat" the system. Once in, impatience causes them to exit at the first signs of adversity/at a tiny profit/as soon as the market begins to consolidate. This often gives me fodder for lessons on the dangers of micromanagement and my "dead money reports" (see the video below for examples). The point is that you'll never succeed at trend following unless you catch the occasional home run. And, you do that by mostly letting trades unfold, which means that you're often not doing anything.

Finding a system is important, but finding one that you’ll actually follow is key. I used to wake up early and stay up late programming trading systems. I'd often brag to my wife, Marcy, about my latest findings. She usually suffered a fool gladly until one day she asked an important question: “How many trading systems do you really need?” That's when it hit me. You just need one. The one that you'll follow. You might want to write that down.

The distance between you and your success isn’t very far. In fact, it’s only the distance between your ears. At the aforementioned conference, I met two young traders. One was successful. One was struggling. Did one have a superior methodology? Nope. They were good friends and trading partners. One was following the system while the other was micromanaging the trades.

So, how do we fix that? First, you have to make sure the methodology fits your psyche. Do you want to be in and out all day long? Can you handle the emotional burden of making all those decisions? I can’t. And, I'd be willing to bet that neither can you-at least not for long. I spoke at a daytrading conference a few years ago. I was the oldest fart there-by a long shot (and I'm not that old!). Like air traffic controllers and inner city ER doctors, we're just not wired for that many emotional round trips. Conversely, if you’re trading a methodology like mine, where patience is really key, can you sit on your hands waiting for opportunities? Once in, can you see the trade to its completion by honoring your stop vs. exiting early? And, if you make it that far, can you continue to wait patiently for the initial profit target to get hit and then stay with it via a trailing stop? As I write this, I think, that's it! I know, again, easier said than done!

Now, assuming that you have a viable methodology—viable because you’re watching someone else trade the signals successfully, or you have thoroughly tested it through a variety of conditions—but you’re still struggling with it:

1. Get Small

Trade at ½ the normal size. If you still aren’t following the system, then get smaller again-half that. When the amount of money is meaningless, it’ll be much easier to follow the system. Now, some skin will have to be in the game. As mentioned in The Layman’s Guide To Trading Stocks, “I’ve never met an unsuccessful paper trader.”

2. Just Do This One Thing On Your Next Trade

On the next trade, and just that one trade, follow the plan—no matter what. If you were successful in doing that—notice that I did not say successful in the trade—then congratulate yourself. Maybe give yourself a small reward. And then, on the next trade and just next trade, rinse and repeat. You don't have to see the next 1,000 trades, just the next one in front of you.

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3. Make Decisions Passive Ones And Not Active Ones

Passive decisions are much easier to make than active ones. Let the market make decisions for you. So how do you do that? Well, that's fairly easy. Once the market opens, a stop order can be used to enter a trade. A protective stop order can take you out of a losing trade or keep you in a winning one. I was stressing over a losing trade just last night, watching it go against me, pip by pip. I realized that I was not practicing what I preach, so I put in a hard stop. This brings us to our next point.

4. STOP Watching The Screen!

Watching every tick doesn’t help the market move in the intended direction. I’ve ruined a perfectly good set of eyes trying to do just that. So, if you are staring at your screens, don’t. Place the trade and then turn them off. If you're disciplined, use alerts to notify you when, and only when, you need to take action. If you have to, physically remove yourself from your office. Or, occupy your time by doing some research.

I keep myself extremely busy. I travel the world speaking the good word on trend following, write articles, develop courses, etc.. I do all of this because I know if I just sit here I will answer the Siren call of daytrading and micromanage my perfectly good position trades.

5. Make Fewer Decisions

If you are not following the plan by making numerous decisions, then make fewer decisions. Maybe the system, in its present state, is not for you. Find a filter that will reduce the amount of trades-or ideally, get better and more selective at your stock selection* (or other markets). Be selective. And remember, the system has to make sense to you. Again, you’ll never be able to trade a system, no matter how great it is, if it doesn’t fit your psyche.

The methodology that will work best is the viable methodology that you will follow. Like Curly said in City Slickers, find the “One thing..” Focus on that.

My nephew has a fresh degree in finance. And, now he wants to trade. That poor bastard. He's trying to factor in fundamentals (my apologies for saying the F-word), world events, and of course, the SITUATION IN NIGERIA (classic Big Dave). I showed him one simple thing in IPOs. I urged him to do that and just that until he became successful. Is he doing the one thing? Wait, it's him-my phone just dinged. Nope, he's asking for my take on the trade wars (I wonder what that is?).

In Summary

Trading is really just two things: find a methodology and trade it. That's it! First, make sure the methodology fits your psyche. Then, if you still can't follow it, get small, make sure you're doing just one thing until you're successful, make fewer active decisions, stop watching the screen, and focus on the next trade--and only the next trade. Damn, I'm worried that my work here might just be done-dropping the mic. Big Dave has left the building.

May the trend be with you!

Dave Landry

P.S. Have you found a system? Are you following it? Leave a comment below to let me know.

I'm probably the last person in the U.S. to watch Game of Thrones, but I finally caved. A friend of mine insisted that I watch it due to complex plot lines, character development, people going medieval on each other, dragons, and the gratuitous soft porn. I'm always skeptical of investing my time getting hooked into a series. I have to admit this one has been quite cerebral. At least that's the excuse that I'm telling everyone. Anyway, I have really been enjoying the quotes. My favorite so far is from Lord Tywin Lannister, the richest man in the kingdom:

Substitute "trader" for "king" and you have some sage advice. Let's explore this further.

A Wise Trader Knows His Methodology

I have a brother-in-law named Andy. He's awesome and a blast to hang out with, but occasionally will draw you into a heated debate. When he asks for your opinion and you give it to him, he not only tells you that you're wrong but also how wrong you are. I have dubbed this "Andying." The term has stuck so much within our family that we often tell each other, "Look, I really do want an opinion. I'm not Andying you." Where was I? Oh, people occasionally send me their methodologies for my 2 cents. I've learned that they really don't care what I think. They're Andying me. They seem to get offended and defensive when I point out the shortcomings. The interaction often goes something like this:

Me: Look, you had a 50% drawdown. And, since a hypothetical system is based on 100% hindsight (AKA "curve fitting"), your biggest drawdown is yet to come.

Them: Yeah, but by the end of the year, it ended in the black.

Living through something on paper and then living through something in reality are two different things. As Yogi said, "In theory, theory and practice are the same. In practice, they are not." Losing half of your money and continuing to plod away at it will likely be much easier said than done. It's not my way or the highway, but I've tried many things and know that unless you know the nuances, you won't make it. For instance, reversion to the mean trading can make for a very brilliant but brief career. You chip away at it one little piece at a time with your "income-producing machine" and then WHACK, you give back months of gains.

Provided that you don't blow up, you return to chipping away at it. Rinse and repeat. Some need the nearly constant state of reinforcement and can live with the occasional disaster. BTW, in keeping Random Thoughts random: I was poking around the net the other day and happened to notice that a well-known reversion to the mean trader now appears to be a trend follower. "Isn't that ironic, don't you think?" Again, it's not my way or the highway, but if you don't know that something bad will eventually happen, you'll be surprised when it does.

I Know My Methodology Is NOT Without Its Nuances

My methodology is not without its nuances. It's streaky. A mentor once told me to stop making it sound so elusive. Unfortunately, sometimes it is. You print money for a while and then go back to grinding it out, wondering when the next print money phase will return. BTW, the day I solve for the streaky nature is the last day you'll see my fat ass. Anyway, the making money phase doesn't define you. It's the in between. This leads us to my next point.

A Wise Trader Knows That Patience Is A Virtue

From the Kirk Report, I picked up this gem referencing Brett Steenbarger's blog: (btw, both are worthy reads!)

Applied to trading, the "folding" is twofold. One, it's not playing when conditions aren't conducive. For instance, I recently couldn't find a setup to save my life. Although I felt a little performance anxiety, I was able to take solace in the fact that maybe a trend trader should be super selective while the overall market is trading sideways. When last Friday's spanking came along*, I realized yet again that sometimes it's better to be on the dock drinking beer wishing that you were out to sea than out to sea wishing that you were back on the dock drinking beer (Something I can attest to! I was once on a boat that nearly sank 400 miles off the coast of Bermuda).

*the original version of this column was published on 09/16/16.

The other "folding" is using stops for when you're wrong. Stops let the ebb and flow control the portfolio-quite often automatically! At the moment (but do check back often), we have 100% winners in the open portfolio (keep reading to see it. Note, more current Services can be found here and the archives can be found here). This is NOT because I'm a genius. It's because I've kept the winners and kicked the losers out. As I wrote in Layman's, I once walked into a gym (don't laugh, I haven't missed my annual workout in years!) and the receptionist asked: "Why the long face?" I explained to her that I was in a bunch of bad stocks. She quipped back in a perky, pitchy voice, "Well, sell 'em and buy some good ones!" I thought WTF does she know about trading? Well, 20-something years later, I know now: apparently a lot!

A Wise Trader Knows That Trend Following Is A Game Of Outliers

Trend following is anything but "push a button, get a peanut." Often a few big trades define your year. As mentioned above, we don't always print money (dang, there I go again!), but when we do, I'm often surprised that some clients tell me it doesn't work. I ask them, Did you take the trade that's now up triple digits? No, but I took those turds you recommended. Well, there's your problem. The outliers make your year. Without them, your performance will be mediocre at best. It truly is a game of outliers.

Ironically, I just received the following email :

"I did not make any money following some of your picks." (when asked about renewing my Core Trading Service)

Well, I don't make money following some of my picks either. The money's made by following all the picks (yours or mine). As Greg Morris says, "People tend to sharpshoot signals." Miss some outliers and numerous small winners, and yes, all you're left with is a loss. Looking back over the closed trades over the last 6-8 months, yes, there were some losing trades:

A Wise Trader Knows Money Management & Position Management

A wise trader knows he can be wrong on any position, even though it sure seemed like the mother-of-all setups at the time. If you have picked the best and left the rest, you let the chips fall where they may. Something as simple as a stop will keep you in when you are right and take you out when you are wrong or no longer right. And, quite often, a somewhat liberal entry can keep you out of a bad trade altogether.

A Wise Trader Knows Himself

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

Sun Tzu

In The Art of War, Sun Tzu wrote about the importance of knowing yourself. A wise trader knows the markets, but more importantly, knows himself. Can you wait patiently for the next big winners to come along, knowing that they will, but not knowing when? I see it all too often. Many don't stick around long enough to reap the fruits of their labor. Can you grind it out and not give up right before the next big trend? Most can't, but if you are going to be successful in this business, you can't be like most. Write that down.

"A wise trader knows what he knows and what he doesn't."

A wise trader knows his methodology, both the good and especially the bad. He knows to be patient while waiting for setups and to be patient once he enters. He knows that he doesn't know exactly what a market will do next, but proper money and position management will take care of that. Above all, a wise trader knows himself.

I explored all of the above and then some in Thursday's (09/15/16) Dave Landry's The Week In Charts. Borrowing a line from my friend Greg Morris, just don't operate any heavy machinery after viewing....

So, KNOW These Things

If you know yourself, your methodology, and your money management, you will succeed at trading. Of course, this is provided that you know what you don't know.

May the trend be with you!

Dave Landry



Source: Amazon.com

K. Ander Ericsson, who coined the phrase "deliberate practice," (1) says that “….the differences between expert performers and normal adults reflect a life-long period of deliberate effort to improve performance in a specific domain.” To get better at getting better, you’ll need:

1. Motivation

2. Pre-existing Knowledge

3. Immediate Feedback

4. Repetition

Let’s explore these further as they apply to trading.

1. YOUR Motivation To Master Trading

Why do you want to trade? The obvious reason-in my best Captain Obvious voice-is to make money. However, you’d be surprised at people’s motives. I often pose the "why trade?" question at trading conferences. "To make money" is often the third or fourth answer, and usually not without a bit of steering from me. Maybe you might want to become a trader to make your evil co-workers jealous, because your boss is douchey, because you’re sick of your current career, or because you just want to prove to your spouse/significant other (and btw, who am I to judge, but you might not want to have both) how truly awesome you are. Yes, these could be the initial motivating factors, but once you dive in, you’ll have to put them aside and focus on the one and only reason, again, to make money!

Provided that your motivations are in the right place, you then must ask yourself if you’re willing to approach it like any other profession. You wouldn’t decide on Friday to become a surgeon, study a bit over the weekend/pick up some Xacto knives, and then start cutting on people on Monday. Even Ludacris would say that’s ludicrous. Yet, that’s exactly what many people do. The barrier to entry is virtually nil in this business. Fund a brokerage account with a few K and voila, you're "a trader!"

Again, you’ll have to approach trading like any other business. No, you didn’t become a doctor, lawyer, or automatic transmission mechanic overnight. It took some time. Trading is no different. In some ways, it can be more difficult because there isn't a clear path. I once received a very nasty email from a medical doctor. He thought my point was that it was easy/easier to become a doctor. This was NOT my point. My point is not to minimize other careers. The point is that there isn't a clear path in trading. With medicine and most other careers, there is.

Case and point: Occasionally, I find myself on panels at trading conferences. In one of these, the "no clear path" discussion came up. Someone pointed out that to become a plumber, you had to have specific training, become a journeyman, pass tests, and then apply for a license. It's a process and a lengthy one. They gave other examples such as flying a plane or a teenager getting their driver's license.

2. You’ll Need Some Pre-existing Knowledge To Master Trading

To get better at something, you will have to have some idea of what you’re doing in the first place. This is where there appears to be a riff between Gladwell who wrote about the 10,000-hour rule and Ericsson who argues that it’s the quality of the practice and not just the quantity. In defending my favorite author, I think many have misconstrued Gladwell’s words (which were actually based in part on Ericsson's research) as a “given.” Even Gladwell admitted that he could bang on a piano for even 20,000 hours and still not be Mozart.(2) His point is that it does take time to cultivate talent. It does.

How Do You Get "Pre-existing Knowledge" If You Don't Know Where To Start? Start by watching the free videos in the Members’ Area.

I often piddle around in the garage to help get my head on straight. One day, I heard a loud noise that sounded like a small animal being tortured. I bravely rushed into the house to save the day. The noise was coming from the bathroom. It was my daughter singing, well, at least making a vain attempt. And, that was just the beginning. In the coming weeks and months, she continued to "sing"-and I use that term very loosely. It became evident that she wasn't going to give up anytime soon. Based on her seriousness combined with the fact that we couldn’t live with the screeching for much longer (nor could our dogs), we decided to get her lessons. As a proud parent, I’m happy to say that she made all-state choir and soon thereafter sang the Star Spangled Banner at a football game with 4 of her choir mates. She then went on to covet the "most talented senior" award in a class of over 500. Ericsson and Gladwell both agree that getting some help throughout the process is key. Should my daughter have continued on her original path without help, she likely wouldn't be in the elite few (and our dogs would have run away).

Twenty-something years ago, I was hired by a trader to program and run scans to help him find setups. Back then, the software was painfully slow. What takes about "a blink of the eye" today took over 45 minutes back then. Rather than just sitting there contemplating my navel and watching the hourglass, I would kill time (which I know will eventually kill me) by looking at charts. This is how my process of empirical research and "treasure hunting" began.

I look at around 2,000 charts every day. I have looked at over 10 million charts over the last 20-something years. Initially, I didn’t know what I was doing, but luckily, I had a lot of guidance from someone who did. I was ableo to quickly make the leap from blind repetitions to deliberate practice. And, since we were using the setups in both our own and clients' trading, I had a constant feedback loop.

You'll need a little help, but I don't think that you need any special talent. I'm with William Eckhardt on this one:

William Eckardt, Source: turtletrader.com

"I haven't seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren't. Many outstanding intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important."

You’ll have to understand how markets work. Obviously, I can’t teach you everything you need to know in just one column, but having the proper mentality goes a long way. My definition of trading via technical analysis is “reading the emotions of the market participants while embracing your own." Figure out how to do that through some deliberate practice, and you'll be wildly successful. That's almost worth a "mic drop."

It’s good to get out every now and then. During the aforementioned panel, someone reminded me that we’re trading traders, not markets. This dovetails in with one of my favorite quotes from Tom McClellan: "When you buy a stock you're not only forming a relationship between you and the company, but you're also forming a relationship between anyone who has bought the stock prior to you. And, those people will screw you!" (watch the first four free Trading Full Circle videos for a more detailed discussion of this).

Yes, you'll need to know what to look for in the first place, but technical analysis doesn’t have to be that technical. For instance, if you’re thinking about buying a stock around 9, and you look at the chart, and there’s a previous range between 10 and 11, then it’s quite possible that those who bought within that range will be looking to get out at breakeven. It’s human nature.

Once you do get a reasonable grasp of the charts, you'll then have to know how to execute. The good news here is that the money & position management is mostly common sense and is often mostly mechanical. Yes, once you get disciplined, a little dose of discretion can vastly improve performance, but the initial concepts are quite straightforward.

3. You’ll Need Immediate Feedback To Master Trading

The great thing about markets is that you get immediate feedback. Unfortunately, factoring in the feedback can be tricky. As I often preach, the market can be a terrible teacher. As just one example, nearly all trades will go against you. So the “immediate” negative feedback might not indicate the ultimate outcome. Resisting the innate urge to micromanage yourself out of the trade isn't easy. After all is said and done, you have to be extremely careful in analyzing your results. You can do the wrong thing and make money. Unfortunately, as you'll eventually painfully discover, "that'll work until 'it don't." Conversely, you can do the right thing and still lose money. This is where an honest post-mortem comes into play (keep reading).

I often speak of the problem with "outcome biases." As humans, we tend to attribute bad outcomes to bad luck and good outcomes to skill. Becoming process vs. outcome-oriented is key. (4)

4. Repetition Is Key To Master Trading

As I often say, on the next trade, and only that one trade, follow your carefully thought-out plan. And, if you can’t follow the plan for just one trade, then maybe trading is not for you.

Okay, enough tough love. In my best Bela Karolyi voice (which I'm told based on my Coonass genealogy sounds a lot more like the "Townie" from Waterboy): "You can do it! If you can't, just reduce your share size down to a size that's nearly meaningless. Once you do follow the plan on one trade, then "all you have to do" is then rinse and repeat for the next 10,000 trades. Time for another mic drop?

Deliberate Practice Is Sharpshooting, Not Taking A Shotgun Approach

Deliberate practice doesn’t mean you're working on getting better at everything all the time. Quite the contrary. You strive to get better at just one thing. Once you accomplish that, you then add in the next piece of the puzzle on your way to mastery. This goes for the absolute beginner all the way up to the most accomplished of the most accomplished in any field!

Those newer to trading try to do everything all at once. Instead, they should focus on just one thing. Quoting Bruce Lee: “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times. Applied to trading, quoting my sister from another mister Linda Raschke: “All you need is one pattern to be successful.”

I can reduce the obligatory 10,000-hour mastery curve significantly. Just trade one pattern. Once you get that down, then slowly add others. If you’re not successful trading one pattern, you certainly won’t be successful trading ten.

So, what’s THE ONE pattern? Well, that’s for you to decide. I’d recommend something simple that you can easily wrap your head around. I think Landry Light Pullbacks, ideally in persistent and accelerating trends, could be "THE" pattern.

Deliberate Practice In Action: Before, During, And After The Trade

You must carefully plan the trade, trade the plan, and then improve the process by doing a post-mortem.

Deliberate Practice Before The Trade

Deliberate practice begins long before the trade takes place. Carefully study the recent big moves. Could you have caught these missed moves using your methodology? Should you have caught these big moves? Is there some pattern outside your current system that might have caught these big moves? You have to frame this within the context of you can't trade everything, and there is no Holy Grail. Also, sometimes a market moves for no good reason. Unless you're a former actor who played a gynecologist on TV (isn't that ironic, don't you think?) with a fresh supply of "Roofies," you can't "kiss all the women."

Once you find something, you must lay out a well-thought game plan. Where will you trigger in? Where will you place your initial protective stop once triggered? And, if you're following along with my hybrid approach to money and position management: Where will you take partial profits (which is simply the entry + risk) and how will you trail your protective stop (both before and after the initial profit target is hit)? For more on this, see the Money Management course in my Member's Area. Also, see the Trader's Mindset course for a discussion on "mind sculpting."

Deliberate Practice During The Trade

I know that you're a motivated individual. Otherwise, you wouldn't be reading this column. You're a person of action. Unfortunately, in trading (especially with my methodology), often no action needs to be taken. Many years ago, I had some trades that were working quite well while I was off sailing the West Indies. This was long before cell phones, so I was completely oblivious. When I got back to the states, I grabbed an IBD at the airport to check on everything. I then announced to the crew what I genius I was. Upon getting back to my office, I immediately cashed in. I then watched like the proverbial deer in the headlights as positions really began to skyrocket without me. Had I just stayed away from my screens, I would have done far better.

As a person of action, it's hard to follow a plan when often there is no action to be taken. The good news here is that there are physical things that you can do to help you follow the plan. You don't have to zip down to the West Indies. You can just turn off your screens. Only observe what needs to be observed. Markets back and fill-A LOT! More-often-than-not, positions will be going against you. In fact, markets only make new highs around 4% of the time. (1) That means that 96% of the time they are backing and filling. So by nature, the majority of time you will be in a so-called "state of regret." For instance, notice Kemet (KEM), one of our biggest winners of the year, has only spent a very small time at new highs.

Even big winning trades will often not move in your favor.

Many times, I'll cuss and fuss and then storm out of my office for a walk around the block (which was around 2 miles when I originally wrote this). Not all the time, but often, I'd return to see that the market reversed nicely while I was out. Whenever this happens, I realize I have put myself through an emotional round trip for no good reason. You must "be as close as you need to be to the markets but no closer" (Market Wizards).

Deliberate Practice After The Trade

You must do an honest post-mortem on every trade. Go back in time to the day before the trade. Forget briefly about the outcome, and ask yourself if you would still take the trade? Did it trade cleanly or bounce around like an electrocardiogram? For emerging trends, was it a well-defined trend turn? (e.g. a Bowtie, see my books, get them free here for a limited time) Or, were you picking tops/bottoms? For established trend trades, was the trend persistent and accelerating? Was there overhead supply? Double-check the market, sector, and stocks within the sector. Did they confirm your setup? And, if not, did you think you had the mother-of-all setups that could trade even without a support group? I know it's cliche, but did you truly pick the best and leave the rest? In the past, I've found myself often saying: "what in the hell was I thinking?" (and, admittedly, on occasion, I still do.) You'll know that it's beginning to click when you ask that question less and less.

So, how do you master trading and pretty much anything else? Constantly work to get better at getting better. Practice deliberate practice.

May the trend be with you!

Dave Landry

After Thoughts...

When I first wrote this column, I delayed publishing because I felt that there was so much more to write. I realized that I was just scratching the surface, and they'll always be more to write on deliberate practice. Since the original publication (2017), a lot of these thoughts have found their way into the Holistic Trader and Trading Psychology courses in the member's area.

Notes and References:

(1) Peak K. Anders Ericsson, "Peak," Freakonomics Interview

(2) Outliers, Malcom Gladwell

(3) Greg Morris. He was referring to the indices, but you get the idea.

(4) Annie Duke's Thinking In Bets is an excellent book here. Terrence O'Dean has done a lot of work here too (referenced in Duke's book). Also, see books to read for a plethora of other books worth reading.

What Is The Landry 100?

The Landry 100 is a hypothetical momentum list of up to 100 stocks. “$10,000” is placed into each position for a total of $1,000,000. Cash is treated as an “asset class.” In less-than-ideal conditions, there might be fewer than 100 stocks. Empty “slots” are filled with cash.

How Is It Created?

Stocks can only be added to the list if they make a new closing high. At this time (July 2025), the 52-week closing high is being used. However, if (or when!) conditions deteriorate, shorter-term highs (e.g., possibly 90-day highs) could be used.

The formula is quite simple: Today’s Close/The 52-week closing high. For Telechart, the formula is as follows: C/MAXC252, where C = Today’s Close and MAXC252 = the 52-week closing high. If the result = 1, then the stock has closed at a new closing high. The results of the scan are sorted by 50-day historical volatility.

What Stocks Make The Cut?

More volatile stocks, within reason, are given priority to fill the slots. Stocks that tend to trade more “cleanly” vs. those that bounce around are also given priority. Also, in general, stocks in the early phases of breaking out are given greater weight than those already making extreme short-term moves. However, there is no official “cut off” for being too overbought.

How Is It Managed?

The list is purely hypothetical, but it is “managed” in real time. Although some real-dollar experimenting is ongoing, the list should not be viewed as an actual investment. The goal is to show “proof of concept” (keep reading).

Underperforming stocks are removed from the list and replaced with stronger stocks. There is constant “window dressing” to ensure the list includes as many of the hottest momentum stocks as possible.

When there are a plethora of strong stocks, issues whose momentum has slowed (even if “profitable”) will be replaced by stronger stocks.

NO money management is used. In the real world, some sort of money management would be required. Profit-taking should be considered alongside some form of damage control.

NOTE: Due to the number of speculative issues rallying significantly and then making a “round trip,” as of May 2026, the 100% rule is being added. Half of the position will be exited on any stock added after 04/30/26 that rallies 100%.

What’s The Point?

The point is to show “proof of concept.”

Through active “management” of the list, money flows are shown. You can see where the money is “stacking up.” At present, Gold and Industrial Metals are the two largest holdings. However, these numbers (as of 07/01/25) have recently begun to decrease since momentum is slowing in those areas. They are being replaced by technology in general (for reference, the Nasdaq and QQQ both closed at new closing highs on 06/30/25). Money flows during less-than-ideal conditions (e.g., early 2025) were into defensive issues (e.g., grocery stores). “Cash” slots also increased dramatically. During poor conditions, there is not “always a bull market somewhere.” Therefore, during these times, more and more slots will become cash (i.e., there will be significantly less than 100 stocks). See this article, updated every 7-10 days, on money flows, and to see the latest Landry 100 list of stocks.

Nuances of momentum “play out.” Examples include “momentum begets momentum:” RGC rallied over 3,000% after making new 52-week highs. And, momentum ends badly. The stock subsequently imploded and was removed from the list for a 1,772% gain. Yeah, that’s better than a poke-in-the-eye, but a significant portion of the gains were given up. Again, there is no money management (sans the 100% rule added on 05/01/26). In the real world, with the stock becoming upwards of 30% of the entire portfolio, some rebalancing should have occurred.

Outliers are key. The secret to trend following is catching the occasional big homerun. Since its inception (it was “rebooted” in May of 2024), the closed positions amounted to a loss of $149,982. However, just the aforementioned RGC “trade” resulted in a gain of $177,240, thereby erasing those losses and then some.

Ride your winners, sell your losers. Through active management, strong stocks are kept in/added to the portfolio, and losers/those losing momentum are removed. This is why the closed trades will likely continue to show extended losses-at least until the occasional outlier comes along.

The list can provide potential setups. For me, that would be pullback-related patterns (e.g., Trend Knockouts, Landry Light Pullbacks, Persistent Pullbacks, etc…). It helps to ensure that great stocks are “on the radar.” Notice below that NAGE could set up soon as a “Double Top Knockout.”

The list often shows the nuances of momentum, such as momentum “getting whacked” first. Many of the stocks in the list will occasionally sell off hard, even though the indices are at or near new highs. When this occurs, the overall stock market usually follows shortly thereafter.

Breakouts, especially in this day and age, have a high failure rate. Therefore, trading a few here and there is unlikely to be profitable. However, if enough are bought (in this case, 100), the chances of catching some huge moves vastly increase.

Many stocks initially fail (hence the breakout failure rate) but later trend nicely. And, obviously, some fail outright. Again, trading a few breakouts rather than a larger number (e.g., 100) is unlikely to be a successful strategy.

I’m exploring other possibilities such as intra-day trading.

Where Can I Find It?

See this Substack post for updates:

In Summary

In a nutshell, it’s a great way to see money flows, provide potential setups, and watch the nuances of momentum play out-both good and bad.

For more information, become a paid subscriber to my Substack (davelandry.substack.com) for daily updates and watch my “Methodology In Action” series weekly on YouTube:

May the trend be with you!

Dave Landry

By Dave Landry

I teach trading for both obvious reasons and not-so-obvious ones. You, too, can benefit from this, especially from the not-so-obvious reasons. Let’s explore this further.

I Teach Trading Because I Like Teaching

Years ago, a friend nicknamed me “Mr. Information.” He had a shirt made for me that said just that, along with a hat that read “Ask Me!” Although he liked to poke fun, I was the first he’d call whenever he needed information (this was long before the Internet).

I Teach Trading Because I Make Money Teaching Trading

Let me be frank. Although I do help a lot of people who have never spent a dime (and may never spend a dime!), I’m not entirely altruistic. I do make money teaching, and getting to see the world in the process doesn’t suck either.

The money for how to make money vs. keeping it for yourself argument comes to mind. If you had a goose that laid golden eggs, why would you sell it? I fully agree. If it were easy to, and I quote, “turn $5k into $500k” then that’s all I’d do, rinse and repeat. It’s not. Like in life, if it sounds too good to be true, it probably is.

So what am I selling? I’m “selling” hard work and common sense. I’m selling something that makes sense conceptually. I’m selling seeking to identify emerging or existing trends and figuring out a way to get aboard them. Then, once in, mitigating losses if I’m flat out wrong, taking partial profits if I'm only partially right, and hopefully (I know, I said "hope") staying with trends that persist for a long, long time. Simple trend following is something that has worked for 100's of years-even 1,000s if you look at old-world commodities. And, since catching a trend is the only way to profit from a trade, finding and getting aboard trends makes a lot of sense.

I Teach Trading Because I Learn While I Teach

If you want to get better at something, teach it. The constant questioning makes me think and rethink my answers. I want to make sure that anything I say is conceptually correct. I certainly don’t want to look like an idiot (although I am okay being called a trend-following moron).

Many are surprised when they discover that I answer all of my own emails (admittedly, sometimes eventually!). Last time I counted (2010 while working on Layman’s), I had replied to over 30,000 emails. I'm not sure what it is now, probably well over 100k. It’s safe to say that it’s a bunch. This helps me to cement the process and reduce it down to its essence.

Note: since this piece was originally written, all this repetitive use has caught up with me. I've had one surgery and if I'm not careful, will need three more. I've also come to the realization that my answering an email on a one-on-one basis is very inefficient. A one-to-many model, where, for example, I answer the question for all to see, is much more efficient. Therefore, I have created a learning management system. Further, so that serious traders can help each other, I also created a Facebook group: "Dave Landry's Trend Traders. See the short intro below to the member's area for a lot more on this:

Being up on stage in front of the big screen, I’ve seen things that I didn’t notice as much on my small screens. For instance, seeing a 4-foot short-term persistent move made me realize that even a short-term persistent trend can be quite powerful. This is especially true during emerging trends or base breakouts. Another example is that it has reaffirmed the power of moving average Landry Light. Seeing the price bars six feet above the moving average is quite the eye-opener.

I Teach Trading Because It Makes Me Work Harder

Trust me, on a crappy day, if I didn’t have clients depending on me, more-than-likely, I’d walk away from my screens and have a few beers. Instead, I put my nose to the grindstone to make sense of everything. Not every day, but often, I see that it wasn’t nearly as bad as I initially thought and felt. Many times, it’s just the normal ebb and flow. And, sometimes, I ended up scratching out or even slightly in the black. Further, by doing the work because others depend on me, I work hard to ensure that I leave no stone unturned-practicing deliberate practice (keep reading). I must exhaust all possibilities because people are watching. I must then weigh that against that no choice-doing nothing-which is always a choice that must be strongly considered before putting capital into harm's way. Primum non nocere, to you or me, comes to mind (first, do no harm).

Surprisingly, I occasionally find great opportunities when I don’t really feel like doing the work due to lackluster conditions, but have to because of you. For instance, back in February (16) when the markets were pretty crappy a client emailed me to tell me he was taking a break from my Core Trading Service because “he could not see any setups for the foreseeable future.” And, quite frankly, neither could I. Yet, that same day, I found two setups. Both went on to hit the initial profit target (roughly 34%), and CNX was closed out for over a 75% gain. I know people wonder what the world would be like without hypothetical questions (Wright!), but I do have to wonder if I would have still done a thorough analysis, given the conditions, if it were just for me. Would I have found two beers instead of these two trades?

I Teach Trading Because I "Throw Off" A Lot Of Valuable Excess Research

Again, I leave no stone unturned. Being held accountable forces me to sift through thousands of stocks and hundreds of sectors nightly. Not always, but often this produces quite a few ideas. Unfortunately, I alone can’t act on all of them. I accept the fact that, unless you formally played a gynecologist on TV (isn't that ironic? don't you think?) and have plenty of roofies, you "can’t kiss all the women.” The good news is that others can use this excess research. It’s a great feeling when someone tells me that they made a lot of money on a stock that was on my Landry List. Now, again, I’m not entirely altruistic. There is a charge for this. However, my real "reward" is knowing that someone profited from something that would have otherwise gone by the wayside.

I Teach Trading Because You Make Me Want To Be A Better Me

I teach because it forces me to practice what I teach and preach.

Jack Nicholson in As Good As It Gets

In good conscience, I can’t tell you not to fight trends and then go out and pick tops and bottoms. I can’t tell you to honor your stops and then ride stocks into bankruptcy. I can’t tell you to follow the plan and then wing it. It's a constant voice in my head telling me what I have to do. BTW, it's a good thing I work alone because I'd bet that the voices in my head would bother my co-workers (that plus me heating up leftover fish in the microwave for lunch).

I once had a bunch of positions that were doing exceptionally well. If fact, things were going so well that I found myself somewhat frozen as I stared at my screens. Right about that time, my wife Marcy popped her head into my office. I informed her of the good news, but then said that I’m not exactly sure what to do. She quickly quipped: “Well, what would Dave Landry do?” She then turned on her heels and walked away. I growled a bit and thought, what would Dave Landry do? "Dave Landry" promptly began taking partial profits and trailing stops higher.

I Teach Trading For Ego Purposes

There’s certainly some filling the Maslow’s hierarchy of needs happening. Don’t worry. I’m not going to go all freshman psychology on you. A few things, though: Helping others realize their goals and dreams is rewarding. If I can make others successful, then I become more successful in the process. This helps my ascent up Maslow's ladder.

Is There A Lesson For Me In All This?

Absolutely! Practice deliberate practice as if someone is depending on you, will make you better, much better. Don’t just look at charts. Look at the charts and ask yourself, could I have caught this move? Should I have?—while at the same time realizing that you can’t kiss all the women, and no methods work all of the time. Do make sure that you exhaust all possibilities. If you find potential opportunities, make sure that you study overall conditions so that you have a little tailwind. And, if you don't, make sure that you have the mother-of-all setups. If not, it's okay to pass. Provided that you worked hard, you can walk away with a good feeling that you're doing the right thing. And, then have those two beers.

Holding yourself accountable, even if only to yourself, will make you a better trader. It’ll force you to cement your methodology, and, here comes the cliché: plan your trade & trade your plan. For you married guys, if you’re brave enough, show your wives what you are doing. According to a study mentioned by Montier, men who got their wives involved in their trading became more successful. Unfortunately, just the opposite happened when wives got their husbands involved. As I have written before, ego trumps emotion when it comes to the pitfalls of trading. If you do decide that your marriage can’t survive a trading partnership, then work to become better, even if no one is watching. Or, better yet, find a motivated partner, play off each other’s strengths, and help each other with their weaknesses. Note: Since this article was originally published, my Facebook group has gotten some traction. We've been helping each other become even more successful.

And Now, Something Completely Different (Hence The Column Name “Random Thoughts”)

From a teaching standpoint, I don’t think I have any competition. I’m not saying that to be flippant. Most aren’t out there teaching being prudent, sitting on your hands when there’s nothing to do, and working hard to fix you. Sure, there are a few (e.g., my good friends Charlie Kirk and Rob Hannah). And, some of my clients are their clients too.

The reason this comes to mind is that yesterday, while cleaning out my inbox, I clicked on a video blog post that said that you should check out your competition from a website design standpoint. So, I did. My A.D.D. kicked in, and I found myself on a popular trader's website. I began reading the blogs vs. checking out the site. Long story endless, I couldn’t help but read a post from someone who was mentally challenged (and that’s an insult to the mentally challenged). He suggested playing the Brexit vote by buying calls and selling puts to finance the trade. Unbelievable. Let me get this straight, let’s put on a trade with unlimited risk and a binary outcome-50/50 at best? I feel for the poor bastards who took that bait. Anyway, that’s Exhibit A. I have no competition to speak of. I do speak of those friends that I respect quite often (e.g., Linda Raschke, Larry McMillian, Greg Morris, John Bollinger). And, they occasionally speak of me too, for which I am humbled. So, if anything, my relationship with the few realists out there is collegial, not competitive.

In Summary

I teach for obvious reasons. I also teach for unobvious reasons. It makes me better, and that benefits both of us. Do the same. Do your homework as if someone depends on you, especially when you don't feel like it. Show a loved one or friend what you are doing and involve them in the process. Hold yourself accountable. You're welcome!

May the trend be with you!

Dave Landry

Related Articles And Videos:

How To Master Trading (and pretty much anything else)

To get good at something you not only have to work at it but you have to practice deliberate practice. You have to work to get better. Let’s break it down and then apply this to the trading process—before, during, and after. Keep reading....

Becoming A Better Trader Through Deliberate Practice...Watch Video

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