IVWT Challenge/Lesson #1: Your Philosophy

IVWT was originally intended to be a forum for truly independent traders. Of course, we've been sidetracked by covering how political policies and processes are destroying the stock market's ability to recover on its own in a timely manner. But let's get back to our "core principles," shall we?

Every smart trading philosophy and model is made up of three ingredients:
1. Timing: When to buy and sell
2. Valuation: What to buy and sell
3. Risk Management: How much to buy and sell

Technical traders focus on timing, value-oriented traders focus on valuation. Every trader should focus on risk management -- but you'd be surprised by how many don't.

So the first IVWT challenge is this: Analyze your trading philosophy. How much is dependent on timing? How much on valuation? Risk management? Don't get analytical, just break it down by percent. We'll cover each of these "ingredients" in the weeks and months ahead.

And the first IVWT lesson is this: If your current trading philosophy or model lacks any of those three ingredients, you will ultimately fail as a trader.

Future installments in this series:
-- Debunking the Trader vs. Investor Myth
-- The "KISS" Test
-- The Power (and Pitfalls) of Timing