Tags: Miller | stock | trading | poker

Trader-Author Miller: Ante Up and Play the Game

By David Nelson and Dan Weil   |   Wednesday, 17 Jul 2013 07:23 PM

Stock trading resembles a competitive mental sport, such as poker, says stock trader Don Miller, author of "Chronicles of a Million Dollar Trader: My Road, Valleys, and Peaks to Final Trading Victory."

That doesn't mean trading equals gambling, he tells Newsmax TV in an exclusive interview. "A lot of the great poker players will tell you that actually poker is not gambling," Miller said.

Poker involves strategy and competition against other players, he notes. So does trading, Miller said. "There is a finite supply of inventory, and you're competing against other market participants to manage . . . [that] inventory. From that perspective it's very strategic."

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The market doesn't go to zero, and it doesn't go to infinity, Miller points out. "It certainly will get extreme at times. But if you've done this for any period of time, you'll understand that there are times when the market is a buy and there's times when the market's a sell," he said.

"That's all based on human psychology." Technical indicators and other forecasting tools merely measure that psychology, Miller says.

"So I choose not to focus as much on the tools themselves as much as the psychology. What does it take to get into the market every day? What does it take to get up off the floor when you've had a bad day?"

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

He says trading stocks is all about fear and greed. "Those will play out time and time again. And once you understand how that works and how that's reflected in the marketplace, then you can get yourself on that side of the market," Miller said.

Asked whether it's more important to know when to take profits or cut losses, he said, "Once you figure out the game, the main challenge is motivation, focus and simply showing up."

As for profit-taking, "I'm typically getting out too soon," Miller said. "Many good traders will tell you that, but I'm able to keep certain positions on to catch a little bit of a larger move when I feel there's an opportunity."

He says he's not worried about high-frequency program trading. "That's because whether a person is making the trade or whether a program is making a trade, there is a person behind that program," Miller said.

And that person is looking to make a profit, he says. "Therefore, the psychology that we addressed earlier comes into play," he said. "You're going to have people that are in at the right time, . . . you're going to have people in at the wrong time, and that's going to play itself out."

So it doesn't matter whether you're trading against a person or a machine, Miller says. The essential point is to understand the psychology.

"When do markets get to extreme levels? When do they pull back? When are they in bear trends, bull trends?" he said. "There are wholesale opportunities in this business that aren't gambling and that are very easily identifiable."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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Stock trading resembles a competitive mental sport, such as poker, says stock trader Don Miller, author of "Chronicles of a Million Dollar Trader: My Road, Valleys, and Peaks to Final Trading Victory."
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2013-23-17
 

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