Dick Diamond - The TRADING Genius

Dick Diamond, The Trading Genius.
In today’s video we will be looking at the career of Dick Diamond. The Trading Genius.
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Dick Diamond traded for more than 35 years, and had a pretty successful career as a day trader. Yes, but this came only after he had a big fall, making huge losses.
In the early stages he used to trade on penny or small stocks in higher quantities. Say a 4 dollar priced stock with ten thousand in quantity. Though initially he made profit in this strategy, he lost a major part of his capital in the 1969 stock market crash.
He tried to reverse engineer both on the technical and emotional front. Spoke to his wife, and discussed whether he should quit or learn trading properly.
Dick decided to learn trading and started reading books on technical analysis, discussed trading techniques with close friends and came to two conclusions: The first is, you need to play both sides that is long as well as short to make money in the stock market. Second, Never trade with penny stocks, but, rather, pick top stocks in lesser quantity, which have higher liquidity.
As he progressed, options trade was introduced in 1975 which helped him trade well. Further, in 1980 as S and P introduced futures with a 500 dollar lot, the trades were good. But the best part happened in 1997 when a mini S and P futures was introduced worth 50 dollars. After this, Dick Diamond traded only in mini S and P futures.
With his enormous success, he started offering formal training courses for stock market trading. He used to give a 4 day trading course which was offered 3 to 4 times a year.
Now let us look at this trading set up. Dick traded on a 2 minute chart with M A C D. He also used a software called meta stock. Along with another software which gave him real time data on his current profit and loss.
Apart from using softwares, his focus was deeply on emotional discipline. He explains it as. If there is no trade as per my set up , I will not trade, but, rather wait like a cat in the bushes. This is the exact point, where most traders fail. They try to create a trade, making it a mere speculation and less of a game of probabilities.
As per Dick, his trade was a 80 to 20 set up. Where for every 10 trades, he would fail 2 times, and exit the market at a small loss. Since he used a 2 minute time frame, at times he could trade 3 to 4 times a day, with small targets, adding up to a substantial profit. But, there would be day’s when he had no trade, since, nothing fitted his trade set up.
He further adds, you can learn the best technical analysis, buy good trading softwares, but, nobody can teach you emotional discipline. It is all in you, and emotional discipline is the key to becoming a successful day trader.
Dick Diamond, also emphasized on doing actual trading as compared to paper trading. He suggested to trade in very small quantities and with strict stop loss. One of the reason for this could be, things look good in paper trading, but, we may not get the expected entry and exit points, as assumed in paper trading. The real experience is the real teacher.
To summarise, what we learn from Dick Diamond is:
We need to Create a trading set up. Fix up the amount to trade.
Set targets for profit and stop loss. Wait till you get an entry as per your trading set up. Do not trade, if you don’t get the desired entry point. Exit if trade fails. Trade in liquid stocks and not penny stocks.
Price of stock is not the determinant, but the liquidity in the stock is more important. In short, both buyers and sellers must have interest in that stock, which makes it highly liquid irrespective of it going up or down. Always Trade in small quantities. Stick to your trading set up for a long time before you scale up.
I hope you liked this video. I suggest you read more about Dick Diamond to be a successful trader like him. Please share your comments and feedback in the comments section below. If you have liked this video, do Post it on your social media.

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