To my dear children,
Jose, Naty, and Sofia
This book would not be possible without my parents. Because you allowed me to trade your money back in 2000, I acquired the confidence to step into the trading world, which brought me here. Now that I’m a parent myself, I know how hard (and rewarding) parenting can be, and my admiration and gratitude has multiplied. Thank you for always supporting me. I love you deeply.
My dear wife, Madelin, understands me better than anyone, and she has provided me great help and motivation in writing this book. Your love and inner and outer beauty is a privilege I’m grateful to enjoy daily. Your compassion and understanding in helping me achieve my mission in life is endless. I love you.
A special thanks to Tom Basso for taking the time to write the foreword. Every time we talk, time seems to fly, and I pick up such wise lessons that I take to heart. His approach to trading combined with the choice to have the best life possible is what taught me to design the life and trading style that suits me best. Thank you, Tom.
To my Elite Mentoring students: You are a wonderful group of people—teaching you brings me incredible joy. You are the drive that keeps me working on new strategies and improving myself. Your bright minds and questions keep me sharp, and you have taught me more than you will ever know.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or will not result in losses. Past results are not necessarily indicative of future results. Examples presented in this book are for educational purposes only. These trading setups are not solicitations of any orders to buy or sell. The author, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Understandably, a lot of people ask: If you’re so good at trading, why do you teach? Why don’t you just trade your own money? In this book, I reveal profitable trading strategies. Why would I do that for less than twenty bucks? It’s a fair question, so I’d like to give my honest answer.
I started trading back in 2000, and I spent thousands of dollars and hours searching for the Holy Grail of trading strategies. Despite devouring all of the information I could get my hands on, I wound up learning what to do based on trial and error. There just wasn’t a lot of good information out there. I wished someone cared enough to show me a strategy with a clear edge, holding my hand as I learned the ropes. Nobody like that existed.
I know how hard it is to learn how to trade. No matter how smart you are or how hard you try, it can feel like years of helplessly swimming in the deep end.
The truth is, successful trading can be simple, but we humans have a tendency to think we need to complicate things in order to get outstanding results. As I’ll explain in the book, winning trading isn’t about finding the perfect strategy—it’s about knowing yourself so that you can identify the perfect strategy for you. Everyone is different and must know his or her strengths, weaknesses, personality, risk tolerance, and personal situation. Trading is far more boring and process-oriented than people like to think.
One of the best ways to master a skill is to teach it. This is common advice, but it’s something I’ve noticed in my own life many times over. While teaching my Elite Mentoring students, I’m forced to dig into my strategies deeper and deeper so that I can explain every part clearly. Teaching keeps me honest and hungry. Since beginning to teach, my trading knowledge has multiplied exponentially, and I’ve eliminated many of my strategies’ flaws and weaknesses. My students are some of the smartest traders I know, and interacting with them sharpens my mind daily.
It’s the perfect combination: I get enjoyment out of teaching a group of focused, successful, like-minded people, and we both improve our trading skills.
My mission in life is to help others transform themselves, because as I’ll explain in the book, it took a lot of self-work for me to become the trader and person I am today. Trading is a lonely profession, and my process-oriented approach can be as boring as it is successful. Teaching is the opposite—it gives me joy, while sharpening my skills. I love to help others, and I love to develop new strategies and ideas and challenge my past beliefs.
When I was younger, I taught white-water rafting guides how to improve their performance and skills. I quickly found that I was good at helping others, and that I loved it. I later discovered my passion and skill for strategic trading. Then it was obvious that my mission in life was to combine the two. My calling is to help others make money by creating their own strategic trading approaches.
Every strategy in this book has a clear edge, is simple in nature, and is easy to follow. They are not the only strategies that work. They are frameworks—the start of what your eventual strategies will look like, depending on your beliefs, objectives, personality, and risk tolerance. The strategies can be tweaked in multiple ways, to best suit you. Everybody is different and thus should have a different trading methodology.
As long as you follow the steps outlined in this book, and have evidence that your personal approach actually works, you will succeed. Whether you do this on your own, or through my teaching, I achieve my mission. I want you to succeed. When you succeed, I’m happy and fulfilled. Good luck, and thank you for reading.
For more information and exclusive offers, please visit
tradingmasteryschool.com.
All graphics contained in this book are also available at
tradingmasteryschool.com/charts-30-minute-stock-trader.
Kind Regards,
Laurens Bensdorp
I started investing when I had some extra money from delivering newspapers at twelve years old and bought a mutual fund with that money. Some fifty-two years later, I’m still investing. It’s been a long and very rewarding ride through investing in mutual funds, then stocks, then futures, then starting a Registered Investment Advisor company, registering as a Commodity Trading Advisor in the United States, trading FOREX, retiring, and now managing my retirement portfolios. I still have a love of the process. I enjoy learning new concepts and inventing different approaches to the process of good investing.
I first met Laurens a number of years ago after he had made some contact with Van Tharp, the trading coach, and he had read The New Market Wizards and a few of my other interviews with industry-based authors. He knew a lot more about me than I did about him when he contacted me. That changed when he visited my summer home in the Arizona mountains, and we had some lengthy discussions about business, investing, and life. Laurens impressed me as a “man of the world” due to his speaking several languages, having business interests and experience in many parts of the globe, and having a great deal of experience, good and bad, with the investment process. I have since met him in Hong Kong, and I periodically have Skype chats with him.
I was very interested in seeing what Laurens pulled together in this book because he has so many experiences that I never have had. I dug in and read it in about two days off and on, anytime I had a moment to continue reading. I could not put it down!
In Part 2, where Laurens discusses automated trading, you get a great summary of some of the great benefits that can come fro
m using the computer to shore up some of your potential weaknesses in execution. The computer becomes a mindless slave. When you program a logical approach to trading into the machine, it obeys and executes according to that logic. There will be no exceptions as long as you keep the program running successfully and feed the machine electricity.
Part 3 of the book has some excellent points concerning self-examination and beliefs. I’ve known people that believe “money is evil,” others that are greedy with no objective goal other than greed, and others who don’t want to spend even a minute on managing their net worth. If you are not prepared to examine yourself and your beliefs, you will surely fail at whatever investment approach you try. You will find a way to sabotage it sooner or later. His list of beliefs that all top traders share is an excellent read and probably a part of the book traders should copy and put in front of themselves to reread often.
In Part 3, he absolutely nails the concept of investing a great deal of effort in your own personal investment approach. Because of my notoriety, I get lots of questions from new traders asking, “What do you use for your buy/sell approach?” I tell them over and over that I am not the same person they are. I have different knowledge, skills, capital to allocate, and experience with trading. It doesn’t make any sense to me that anyone would want to trade exactly as I trade. I try to help them understand that they need to develop a trading strategy that will work for them and not try to copy me.
The next idea that Laurens talks about in Part 3 is the systematizing of the investment strategy. I remember one year when I sorted all the trades I made in a calendar year from highest profit to largest loss and noticed that one trade in Japanese Yen that I had held all year long was the difference between making a large single-digit gain that year and breaking even. In other words, had I overridden or missed that single Yen trade, all the other good work I did all year long would have been worth nothing. The next year I performed the same exercise and found that two trades were the difference between a double-digit gain and breaking even. That surely emphasized to me the need to execute my strategies as close to perfection as is humanly possible.
This example shows how important it is to follow your rules in a trend-following trading strategy. However, that is not the only way to trade. Some might opt for a mean-reversion strategy such as those outlined in Laurens’s book. You will still need to execute your trades as perfectly as possible, but there will be less dependence on one to two trades per year. It all comes down to what fits you the best.
Being human means having flaws, making mistakes from time to time, and possibly not being able to execute a trading strategy flawlessly. Enter the computer. Since I am a chemical engineer by degree, I found it straightforward to program the various steps I was taking into a series of programs that essentially did my trading strategy for me. I spent years working hard to put myself out of work. No longer did I have to concern myself with being on a vacation or being sick. My automated trading strategies executed the orders that should be executed without flaw.
I didn’t have to concern myself with what was happening in the world, either. When George Soros had his famous billion-dollar short profit on the British Pound, I was short the Pound as well. My profits were not at all due to my investment brilliance or thinking. They were simply because the British Pound had gone into a down trend, my computerized strategy yielded a sell signal and went short, and I profited from that action. It was the same exact decision-making that would lead to the next one thousand trades that my strategy would execute. Guessing what someone like Soros or any other “famous” money manager is going to do or agonizing over volumes of fundamental data to make a decision will just make you exhausted, confused, and unable to pull the trigger on many trades. That would definitely not help your cause much. Laurens points this out in his book multiple times, and he’s dead on with that advice, in my opinion. To Laurens and me, trading is a numbers game. The larger the amount of sample size in number of trades, the more we hope to create probable success. In some of the strategies I traded, I knew that over two-thirds of my trades would be losses, but I also knew that when I was with the market, I would have trades that had sizable profits to make up for the smaller losing trades. Replicating that process over and over in a tireless fashion got me to where I wanted to be, instead of just being lucky every now and then with one spectacular winning trade.
Laurens captures perfectly in Part 4 the importance of understanding who you are and designing your approach to the markets in a way that will make you successful in trading. This single concept is probably the most frequent reason that traders fail. They may have a decent strategy and decent risk control, but they interject their own fears and emotions into the trading, causing the strategy not to be executed correctly, resulting in the strategy’s downfall. At that point, they’re off to the next great idea, and the process is repeated to major frustration. With some easy-to-understand examples, he shows how various personalities match up to very different approaches to trading and how all of them can work going forward. I’m more of a trend follower at heart, but that is not how all traders should trade. There are a lot of pathways to success in trading, and you have to find yours.
Another aspect that Laurens gets right in Part 5 is the concept that if you can automate your decision-making process to a large extent, you are not limited to one fixed strategy. When I ran Trendstat Capital Management with $600 million under management back in the day, we were trading stocks, 20+ mutual funds, 70+ futures markets, 30+ foreign exchange pairs, and 10 commodity options using multiple strategies within each investment area. Daily execution was handled by only two traders with a team of four computer experts, including myself, and three people in administration backing them up. And talk about scalable—we could have handled twice as much with the same people simply by adding a few inexpensive computer servers! Laurens shows some simple examples of how combining together strategies logically should increase the robustness of your overall trading, increase reliability, increase return to risk measures, and help you achieve more long-term success in trading. I have not used some of the specific software that Laurens talks about in the book, but I have little doubt that Laurens and his programmer have done their finest in marrying the concepts outlined in the book to the software and getting it to function smoothly. The investing process at that point becomes routine, almost boring. We all unemotionally brush our teeth daily and think nothing of it even though it leads to good dental health in the long term. Running your investment strategy can be just as routine and unemotional, leading you to long-term financial health.
Chapter 14 in Part 6 covers some important forward-looking advice to would-be traders. Your strategy, no matter how well suited for you and well researched it is, will still have to react to new things that the market will throw at you. How well the strategy adapts to changing conditions will dictate some of your future success. He correctly implores the reader to “treat it like a business.” That is all it is. As Laurens points out, if you want excitement, thrills, and adrenaline fixes, find them elsewhere. If you trade to satisfy those needs, the markets will shred you.
That doesn’t mean you don’t have other challenges as a trader. Even with systemized strategies, you will have issues with executing brokers, financial crises that create aberrant trading challenges, power and internet outages that can be trying, and countless times when you don’t feel like doing anything with your trading. But I promise you, if you can take the business approach to the process of investing that Laurens’s book maps out, you have a shot at getting out of your own way, and you, too, can “enjoy the ride” of successful investing.
– Tom Basso
Featured in The New Market Wizards as “Mr. Serenity” by Jack Schwager
Author of Panic-Proof Investing: Lessons in Profitable Investing from a Market Wizard
Former CEO of Trendstat Capital Management, Inc.
Former director of the National Futures Association, one of the US regulato
ry organizations
Former arbitrator for the National Futures Association
Former director of the Society of Asset Allocators and Fund Timers, Inc. (SAAFTI), now known as the National Association of Active Investment Managers (NAAIM)
Bachelor of Science in Chemical Engineering from Clarkson University, Potsdam, NY
Master in Business Administration from Southern Illinois University at Edwardsville
Now happily retired and enjoying the ride!
You pop your head outside the window of your office, and you can hear the ocean. You’re doing your thirty minutes of daily “work,” entering your orders into the broker platform. You could have done it first thing in the morning, but you decided to go for a swim in the ocean instead. Afterward, you’ll go cycling in the mountains, and spend uninterrupted time at night with your wife and children. Tomorrow, you’ll swim for as long as you want to, again. You don’t have a boss, so nobody is nagging you to get back to work.
Then, tomorrow you’ll put in your thirty minutes of work and won’t feel like doing anything else that day. You’ll call your wife. “Want to drive two hundred miles to Seville?” You go and explore an exotic city with the love of your life on a Tuesday afternoon.
You’re living a life of financial freedom, and three hundred days of sun, in southern Spain. Next week, you’re off to the Caribbean coast in South America, with your family, to visit your wife’s hometown. You’ll take your “work” with you: your thirty minutes a day of pressing a few buttons to maintain the financial freedom your automated trading strategy has granted you.
During the same trip, you’ll visit Costa Rica, in which you have various business interests unrelated to trading, giving you additional passive income.
You do whatever you want, whenever you want. You only work when you’re in the mood.
The 30-Minute Stock Trader Page 1
