A 30-year contrarian stock trader shares 3 harsh truths you must understand to remain profitable, regardless of market conditions
The new wave of retail traders that flooded the stock market during the bull run that engulfed most of 2020 and 2021 was an all too familiar story for Shapiro. He began as a young ambitious trader himself. He was in his early 20s and had been working at a Hong Kong commercial bank. His day-job fatigue led him to dabble in themarket during the boom that ran from 1990 to 1994. It seemed easy to make money then. But once the bull left town, he lost it all.
Of the 30 years he has been trading, he told Insider he has been consistently profitable in the last 23 of them. He added that he has averaged about 15% returns annually with a maximum drawdown of 5%, according to Shapiro. In 2020, he was part of a line up of traders profiled in Jack Schwager's book"Unknown Market Wizards'', where he shared his contrarian view.
There are also trades that may have worked at one point that eventually stop working, he noted. When Shapiro was developing his strategy, he kept a journal of all his trades. He would then review his history to see which strategies stopped working. He would eliminate them. This is how he was left with a single type of trade. A very large percentage of people that get involved in trading are going to lose money.
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