Praise for Trading from Your Gut

Step by Step
When I resumed trading in 2001, I started an online trading dis-
cussion forum. Traders, and those who wanted to become traders,
98
T
RADING FROM
Y
OUR
G
UT
From the Library of Daniel Johnson

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ptg
could post questions to more experienced traders. Many questions
were directed to me. Some were specific questions about the meth-
ods we used as Turtles, which were easy to answer. Traders who
wanted to emulate our success asked the more difficult questions.
They wanted to be long-term trend followers.
I had to tell them the truth: For most people, long-term trend
following is not a viable way to trade because
• Most people don’t have the necessary amount of money to
have a reasonable chance of earning good profits. 
• You can’t earn the 100% average annual returns I earned as a
Turtle using the same methods we once used. 
• Trading using a long-term trend-following approach requires
the ability to stomach sizeable drawdowns, which most peo-
ple don’t have the emotional constitution for.
Trying to trade with a system that you can’t get behind with your
whole mind is pointless. You need to find a method that harmonizes
with your whole mind and your psychological makeup. For most
people, the old Turtle-style method is not that system. 
So if trend following isn’t suitable for most people, what sort of
trading is?
Is it swing trading, in which the trades last for days or a few
weeks; or day trading, in which the trades last for minutes or hours?
Fortunately, most traders can easily make this decision because the
process of elimination leaves them with only one viable choice. For
most traders, swing trading is the obvious choice.
C
HAPTER
6 • T
RADING
S
MARTS
99
From the Library of Daniel Johnson

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ptg
Day trading requires that you devote the entire day to trading.
This is not an ideal scenario for many traders who maintain a full-
time job and trade a small account on the side. Most traders need an
approach that won’t take up all their time—one that they can do