It’s a simple fact that many investors are passive, meaning they buy and hold positions for a long time before seeing returns. Passive investing might be thought of as more conventional and safer, but it can also limit your returns somewhat and prevent you from taking advantage of opportunities that may present themselves quickly and then go away just as fast. A more active style of investing with the potential for higher returns is known as swing trading, and not surprisingly there are many online tools and resources that aim to suggest good picks for investors who want to pursue this style. One of those is a service called the Mindful Trader, and it is well worth closer consideration. For a good starting point, consider what others have written about it in the past.
What (or Who) is the Mindful Trader?
The Mindful Trader was founded by a Stanford University economics graduate named Eric, who currently residents in California with his family. While the actual subscription service is relatively new, Eric had the foresight to document his investment picks over the past 20 years and offers those results publicly so anyone can examine his track record before signing up for the Mindful Trader.
Perhaps the most important feature of the Mindful Trader is tied directly back to Eric’s education in economics. All of his picks are driven by data, having crunched numbers for 20 years and used greater than than 5,000 sets of code to determine what works best for identifying successful swing trades. Eric does not trade the news, current events or his gut feel – if you like to take emotion and noise out of investing and strictly listen to the numbers, the Mindful Trader should appeal to you.
Swing Trading vs Day Trading
There’s a reason why most investors tend to be passive – most of us are not full time traders, and instead invest in the stock market to protect and grow our earnings from our full time job. Swing trading by definition requires paying attention to the market during active trading hours, which for most people coincides with the regular work day. That said, swing trading – at least as the Mindful Trader defines it – is a bit more passive than day trading, where mere minutes can make the difference between a trade returning gains or losses. Mindful Trader positions tend to last for around a week, meaning that if you are not constantly logged into your trading platform and ready to pull the trigger the second Eric sends an alert, you can still use the service.
The Mindful Trader: What to Expect
There’s not much complexity to what the service provides – it sends you stock alerts. Each alert has several different pieces of information to help you act on it. The alert will provide the ticker symbol of the stock being recommended and specify whether it is a bought or a short position. Most are buys, but Eric will occasionally send alerts suggesting shorting a stock. The alert also shares the sale price that he paid, contains guidance on what kind of stop loss parameters to set, and suggests a target sell (or buy, in the case of a short) price.
Costing $47/month without any introductory promotional offers, the Mindful Trader will take a bigger bite out of your wallet than some stock picking services geared to more passive investing styles. That said, considering the amount of work necessary to refine Eric’s system and the more volatile nature of swing trading, the price point does represent good value. Others have broken down what the service offers and its pros and cons.
Does the Mindful Trader Work?
Swing trading is inherently a bit more volatile than passive investing, so it is completely appropriate – and in fact quite important – to check the credibility of the source you are taking swing trading advice from. Here, Eric’s track record should put most at ease. Over 20 years, his median annual return is 146% – that’s the kind of figure that some passive investors take a decade or more to achieve!
Of course, nothing is a straight line and Eric acknowledges as much. His first couple of years tracking results coincided with the dot-com bust of the early 2000’s and his returns were only 6% and 8% in 2001 and 2002 respectively. That said, most years were north of 100% and some years had simply eye-popping results, like 2014’s 295% return. That’s tough to do without visiting a casino! If it sounds like something you’re still curious about, consider signing up today to see for yourself.
Is the Mindful Trade Right for Me?
It’s always a personal answer when trying to determine which investment advice service is best for you. To seriously consider swing trading you need to have some time to focus on the stock markets on a more day-to-day basis rather than month to month and be prepared to execute trades quickly when they are recommended.
The Mindful Trader advises that for best results, it’s ideal to start with around $10,000 which is a higher barrier to entry than some may be looking for. You can try to work with less but your margin for error will be reduced.
That said, if swing trading has always intrigued you, it’s really hard to go wrong with starting out by seeing if the Mindful Trader can deliver the returns you’re hoping for.
