How to lose money profitably
I have met Mark Cook at an ATIC event about two years ago and wish to share this post by Jim Wyckoff:
The title of Mark Cook’s lecture at the recent TAG 21 conference in Las Vegas may seem a little odd at first. However, successful traders know it’s the amount of profit realized in trading that’s important–not just the percentage of winning trades.
Cook was a featured speaker at the Technical Analysis Group (TAG) 21 conference, sponsored by INO.com and held the weekend of Nov. 19-21 in Las Vegas. The annual conference is put together by Tim Slater and consistently features some of the world’s best traders–be it in stocks, options or futures.
Cook is from East Sparta, Ohio, and operates M.D. Cook, Inc. from his family farmhouse. He manages his own proprietary account and offers a trading advisory service, “Mark D. Cook’s Trader Advisory,” which focuses on S&P 500 futures, T-bonds and OEX options. This professional trader’s lively presentation focused on knowing your own risk tolerance in trading and preserving capital.
“A great trader who has made tens of millions of dollars from the stock and commodities markets told me the one individual universal reason for failure is the inability to take a loss. This has become my motto, as the true path to riches lies not with the wins, but managing the losses in a prudent, confrontational manner,” says Cook.
He shared with the audience his first few years of unsuccessful trading, including losing large sums of money. Then, he came back from the brink. Sheer determination and hard work are factors Cook cites that turned him into a successful professional trader.
He developed the Cook Cumulative Tick indicator, and overbought-oversold indicator, which draws on correlations between the S&P 500, T-bonds and S&P 100 index (OEX) options. Cook won the 1992 U.S. Investment Championship with a 564% return. The trading veteran advises traders to keep a trading diary and have a daily ritual when trading. Have a trading “battle plan” before entering the trade. He said traders should have complete faith in the indicators they use to trade. Trading losses will occur with every trader. The key is to manage those losses and not let ego get in the way of sound decision-making. “The true path to success always must journey through failure. All–and I mean all–the million dollar traders I know had severe losses. And only when they coped with the losses did they achieve true success,” Cook said. “The road is long–perhaps five to 10 years. The emotions will sometimes be an obstacle that just plain wins that battle.
“The true winner is the one who perseveres. The race is a marathon and not a sprint. Recognition that all humans fall short of perfect is the first step to the trek to knowing yourself and knowing your limitations. “However, you must also keep foremost in mind that our God-given talents are very rarely realized to the true extent of the gift. “Trade and prosper–it is an attainable American dream,” Cook said.
“A great trader who has made tens of millions of dollars from the stock and commodities markets told me the one individual universal reason for failure is the inability to take a loss. This has become my motto, as the true path to riches lies not with the wins, but managing the losses in a prudent, confrontational manner,” says Cook.
He shared with the audience his first few years of unsuccessful trading, including losing large sums of money. Then, he came back from the brink. Sheer determination and hard work are factors Cook cites that turned him into a successful professional trader.
He developed the Cook Cumulative Tick indicator, and overbought-oversold indicator, which draws on correlations between the S&P 500, T-bonds and S&P 100 index (OEX) options. Cook won the 1992 U.S. Investment Championship with a 564% return. The trading veteran advises traders to keep a trading diary and have a daily ritual when trading. Have a trading “battle plan” before entering the trade. He said traders should have complete faith in the indicators they use to trade. Trading losses will occur with every trader. The key is to manage those losses and not let ego get in the way of sound decision-making. “The true path to success always must journey through failure. All–and I mean all–the million dollar traders I know had severe losses. And only when they coped with the losses did they achieve true success,” Cook said. “The road is long–perhaps five to 10 years. The emotions will sometimes be an obstacle that just plain wins that battle.
“The true winner is the one who perseveres. The race is a marathon and not a sprint. Recognition that all humans fall short of perfect is the first step to the trek to knowing yourself and knowing your limitations. “However, you must also keep foremost in mind that our God-given talents are very rarely realized to the true extent of the gift. “Trade and prosper–it is an attainable American dream,” Cook said.
