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out before you get in.
2. Keep losses small and protect your breakeven point once you attain a decent

profit.
3. Never risk more than you expect to gain.
4. Never average down.
5. Know the truth about your trading—study your results regularly.

Ryan:

1. Cut your losses and keep them small.
2. Be extremely disciplined.
3. Trade smaller if you have a number of losses in a row.
4. Never let a good gain turn into a loss.
5. Move money from your losers to your winners.

Zanger:

1. Never let a stock get below what you paid for it.
2. Never chase a stock that is up more than 3–5% above its pivot or breakout

area.
3. Avoid options.
4. Reduce position size after a good move up.
5. Hang on to those winners and let go of the laggards.

Ritchie II:

1. Always trade with a plan, specifically one that evaluates risk in every possible
way for an individual position as well as your entire portfolio.

2. Always reduce trading size after a big loss or losing period.
3. Shift capital to ideas and strategies that are working and reduce it from ones

that aren’t.
4. Guard your emotions with equal value to the way you guard your capital.
5. Bring your “A” game every day.

S11-6: Why does the average investor fail to achieve big performance?

Minervini: The following are some of the main reasons traders fail to attain

big performance in the stock market:
• Use poor selection criteria.
• Don’t cut losses—most common mistake.
• Add to losing positions—the number one reason traders blow up.
• Don’t protect profits—they let decent gains turn into losses (very common

mistake).
• Don’t know the truth about their trading—they fail to conduct periodic post-

analysis.
• Don’t commit to a strategy—they experience what we call style drift and give

up too soon (also very common).
• Have a breakdown in discipline—even if they have rules, eventually they

break them.

Ryan: Either they don’t have the right emotional makeup to invest, or they

won’t study their mistakes and correct them. If someone employs a growth stock
strategy, there are a lot of books from great traders like Mark Minervini, William
O’Neil, and others that lay out the right rules for them, but it is the average
investor’s responsibility to make it work.

Zanger: The average investor usually has a full-time job and likely kids and

many other distractions that consume his or her time. This leaves little time to do
the homework and chart pattern interpretation required to rise above just
average.

Ritchie II: Average investors certainly don’t understand enough about the

market to begin with to have consistent big performances. Even if they did
though, there would be an even smaller number who had the knowledge as well
as the discipline required to consistently follow through with doing the right
things. As my father eloquently points out in his recent book My Trading Bible,
knowledge and talent are great, but “discipline gets the job done.”

S11-7: What advice would you give to a new trader?

Minervini: Get a good role model, someone who has already accomplished

what you’re aspiring to do. Don’t get discouraged if you don’t perform well in
the first few years; it takes time to learn how to trade. Realize that you’re going
to make a huge number of mistakes and that you need to learn from those
mistakes; they are your best teacher. You have to take action and gain
experience. Come up with a plan and take action. Any plan is better than no
plan.

You must be willing to put in the work and own your failures. Then you can
own your success. Understand that there are no “secrets.” For most traders, the
biggest challenge is sticking to a strategy and maintaining discipline. Most
traders would fail even if you gave them a successful strategy because they can’t
commit to the learning curve and make it through the difficult times. They lose
confidence in the strategy, and they lose confidence in their own abilities.

Ryan: Read all the material put out by William O’Neil, Investor’s Business

Daily, MarketSmith, and Mark Minervini. Study it and start investing. Even if it
is a few hundred dollars, get started. You will learn a lot with your first
investment. Learn from your mistakes and correct them. Never give up, and keep
trying. With enough effort, your returns could make a tremendous difference in
your future.

Zanger: Read the books I’ve noted previously. Then start trading lightly

without margin or options until you can put together solid gains for six to nine
months and have lived through a market correction as well as can spot a market
or stock reversal.

Ritchie II: I would keep it very simple and tell new traders to focus on what

I call the “three Ms”: a market, a method, and myself. If you get all three
working together, you’ll be successful.