Darrin Donnelly, co-author of a book about Warren Buffett explains the system of investment, Warren Buffett’s investment philosophy is the opposite of the behavior of stock traders in general. Buffett bought shares of the company for a period of decades, not in days, weeks or months, by contrast, traders often take short positions and act quickly to make profits.
However, traders can actually apply a combination of several types of Buffett-style strategies and Darvas Trading System that was introduced Nicolas Darvas, a successful trader in the world. The trader can learn the eight principles of both the investment whiz.
- Be Yourself with the Right
Warren Buffett lives in simplicity. He does not spend money for luxury. He often spent the night just to play bridge and reading. He likes the quiet life and to develop appropriate business his hobby.
The biggest motivation for a trader is freedom, need not be too ambitious to have a lot of money. Behavior of traders who want to live in luxury like the others is the beginning of the disaster.
- Separate Yourself from the bustle of Stock
Nicolas Darvas success as a trader for trying to avoid the hustle and bustle of the news and various opinions that come from Wall Street. Darvas chose to spend his time in Paris, while Buffett has set up shop in the central United States. The bottom line investor or trader is better to live quietly in order to make much better decisions.
- Discover your Passion
When asked about the key to success in life, Warren Buffett often advise students to find what they like and then find ways to make money. Buffett really loves what he does.
Successful Traders feel the same about their chosen way of life. They love charts and analyzing them. They read about new industries are developing. They love capitalism and the extraordinary opportunity offered by the stock market to anyone. They like the games being traded. To succeed as a trader, you must have a true passion.
- Wait for the Perfect Opportunity
Warren Buffett often quote the legendary baseball player Ted Williams. To become a good hitter, you should get a good ball. That is, you do not have to swinging at every pitch. Instead, you must be patient and wait for the perfect opportunity.
The same goes for traders. Traders are waiting for the right investment opportunity, discipline and avoid excessive transaction. Successful traders wait while technical and fundamental analysis before execution and enter the trading arena.
- Believe in Yourself and Your System
Buffett has never worried about its investment in the long run. He believes in himself and his abilities. He believes the approach chosen for investment. When you really believe in yourself and your system, you will be able to withstand a temporary setback when you are in doubt. You will be committed to the plan and persist through difficulties that may confront along the road.
- Adapting to Changing Conditions
Warren Buffett has demonstrated the ability to adapt to environmental changes. Buffett’s investment philosophy has evolved over several decades. However, Buffett has chosen to accept the changes, not to fight it.
A trader must adapt to changing conditions. What worked years ago or even months ago, may not happen today. Overall philosophy of your trading system must not be tampered with, but developed according to market developments. Darvas investment system has been developed since 50 years ago.
- Read, Read, Read, and Keep Reading
To succeed in any endeavor, you can never stop learning. The trader must do the same thing, including re-reading the classic trade books. Reading books on trading and investment system that may have nothing to do with your particular strategy. You never know when you’ll find some new tactics to increase your knowledge.
Reading daily newspaper, found a new company and new technology, reading biographies of successful people, and others. Knowledge is power and it’s not a coincidence. We will find success when we become people who love to read.
- Have Fun and Not Too Serious
Familiarize yourself with fresh humor and intelligent. This will make your life enjoyable. In fact, Buffett ever laugh at himself when recalling the accident that ever happened. The important thing is he trying to please himself and not take himself too seriously.
