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Cover design: Wiley
Copyright © 2015 by Dick Diamond. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
Charts in the book were created using the MetaStock trading platform, and have been used with permission.
© MetaStock 2014.
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Library of Congress Cataloging-in-Publication Data:
Diamond, Dick (Stockbroker)
Trading as a business: the methods and rules I've used to beat the markets for 40 years / Dick Diamond.
pages cm. – (Wiley trading series)
Includes index.
ISBN: 978-1-118-47298-9 (paperback)
1. Investment analysis. 2. Speculation. 3. Investments. 4. Portfolio management. 5. Stockbrokers. I. Title.
HG4529.D497 2015
332.64-dc23
In 1979, I was sitting between two traders at a specialty brokerage firm. The one on my left was on the phone all day, working his contacts to get preopening shares in initial public offerings, which he would jettison at a profit shortly after the deals. He solicited opinions from friends to figure out hot stocks to ride. He was always long, never short. The guy on my right was a plunger who would identify markets that were extended and then bet huge wads on a reversal. I was there when a reversal didn't come, and he was gone.
Sitting across the room was a loner who quietly worked his system. The friend to my left suggested I meet him, so I did. I asked him what he was doing. He said he traded options, and I could sit and watch if I wanted. His name was Dick Diamond.
Most of the traders in the room were chatty, but Dick was quiet. Mostly, he just watched the screen and updated his indicators. Then every now and then he would sit up straight and become hyperalert. Then – bam – he would call in a trade. (There were no electronic trading platforms back then.) He would stay on edge for a period of time, maybe an hour, and then call to close the trade. Then he relaxed again.
