11 Powerful Lessons from the US Investing Champion – J Law

1. Could you tell us a little bit about your journey and where it all began?

My (J Law) trading journey began by chance. Sixteen years ago, in 2009, a friend of mine brought up the topic of stocks in a conversation, which sparked my curiosity. Like many beginner traders, I started with zero knowledge. I didn’t understand any financial jargon, and my stock picks were purely based on news articles and recommendations from financial magazines. Unsurprisingly, this approach led to consistent losses. After two consecutive years of losing money, I realized that this way of investing simply didn’t work. That’s when I made the decision to properly educate myself about trading.

I enrolled in numerous courses, read extensively, and meticulously analyzed over 1,000 of my own trades. I experimented with different strategies, even trying two completely opposite approaches—value investing and day trading. Over time, after experiencing multiple bull and bear market cycles, I didn’t immediately become a consistently profitable trader, but I was able to identify the right direction to improve because I have always been good at learning and reflecting on my mistakes.

A major breakthrough came when I started conducting in-depth reviews of all my trades. After analyzing thousands of them over the years, I gained a deep understanding of myself—what types of trades I performed well in, under what conditions I thrived, and conversely, what types of trades led to losses and why. I realized that success in trading isn’t just about mastering strategies; it’s about understanding oneself. Once I shifted my focus to refining a system that suited my personality and strengths, my trading performance improved significantly.

Throughout the years, I’ve experienced losses—including some severe ones—but every mistake became a learning opportunity. Over time, I developed a structured and systematic approach that fits me well, and I have continuously refined my trading style. My real turning point came when I started treating trading as a profession rather than just a hobby. That mindset shift made all the difference.

2. Were there any books that you read or any other top traders that really influenced you and helped you along your path?

Absolutely. In fact, there are too many great books to count. Some of the most impactful ones for me include works by Mark Douglas, Stan Weinstein, Mark Minervini, Nicolas Darvas, William O’Neil, Adam Grimes, Dr. Alexander Elder, Peter Lynch, and, of course, the Market Wizards series by Jack Schwager.

Each of these authors and traders has imparted valuable trading philosophies and techniques that have helped shape my personal approach to the markets. I strongly believe that reading is incredibly beneficial for any trader or investor. However, there’s an important caveat: reading alone won’t make you a great trader—just like reading about swimming won’t teach you how to swim. The key is to internalize the knowledge and adapt it to your own trading system, rather than blindly applying everything from a book without understanding how it fits your style.

One of my favorite reads is the Market Wizards series by Jack Schwager. These books offer insights from legendary fund managers and traders, giving me a broader perspective on different market participants and their unique approaches. They helped me develop a big-picture mindset and understand the psychology behind successful trading.

Another book that had a significant impact on me is How to Make Money in Stocks by William O’Neil. This book helped me understand the logic behind supergrowth stocks. The very first chapter is a treasure trove—it showcases historical chart patterns of stocks that multiplied in value over the past century. I’ve revisited this chapter countless times, memorizing those price patterns. This deep study reinforced my belief that, in the right market conditions, holding leading stocks for an extended period is the key to making big money. Although I also engage in short-term trades, this book gave me a long-term mindset, which, in turn, improved my short-term trading as well.

William O’Neil is best known for his CANSLIM model, which provides a systematic approach to identifying strong leadership stocks. While I don’t strictly follow CANSLIM in my stock selection and trading, I do believe it offers a great framework for learning how to spot high-potential stocks.

Another book that stands out for me is Trading in the Zone by Mark Douglas. If you’re not a complete beginner in trading, you’ll probably agree that psychological resilience is the ultimate factor determining long-term success—far more than stock selection or technical skills. This book transformed my approach to trading by shifting my focus toward probabilities, allowing me to detach from individual trade outcomes and concentrate on executing my strategy consistently. It helped me develop the discipline to trust the statistical edge of my system over time, rather than getting swayed by short-term news, market noise, or emotional impulses.

Beyond books, traders like Mark Minervini and Dan Zanger have also greatly influenced me. Their disciplined approach to trading and ability to capitalize on strong market trends taught me the importance of structure and execution. Mark Minervini, in particular, has been a role model—not just in trading but in mindset and discipline. Interestingly, both of us have attended Tony Robbins’ courses, and I feel that we share a similar philosophy on success and personal growth.

In recent years, I’ve also gained a great appreciation for Warren Buffett—not just for his long-term investment returns, but for his wisdom and perspective on life. At the core, it’s not just about making money but about having a clear vision and philosophy. For now, I don’t own a sports car; almost every car I’ve had has been a Toyota, and I find that practicality aligns well with Buffett’s mindset. His long-term vision and ability to see the bigger picture are qualities I truly respect and strive to incorporate into my own market perspective.

3. How would you describe your own personal time frame? Would you classify yourself as a swing trader or position trader?

I consider myself both a swing trader and a position trader. My holding period typically ranges from a few days to several months, depending on market conditions and the characteristics of the stock.

If a stock has strong fundamentals, aligns with the hottest market themes, and continues to show strength on technical charts, I’m willing to hold it for a longer period. This falls under position trading—where I ride the trend as long as the stock maintains its momentum.

On the other hand, if a stock lacks profitability, isn’t free cash flow or cash flow positive, or has weaker fundamentals, but is showing strong price action on the charts—especially if it’s part of a hot sector—I will approach it with a swing trading mindset. In this case, my goal is to capture the alpha of the move, exit, and then either wait for another entry opportunity or move on to the next market leader.

That said, I always remain flexible because the market environment dictates which strategy is most effective. The ability to adapt to market conditions is key to long-term success. For example:

• In a strong, downtrending bear market, the best strategy might be shorting weak stocks on rallies or even focusing on day trading to avoid overnight risk.
• If you’re trading countertrend moves in a bear market, long positions should generally be kept short-term.
• In a clear bull market with strong momentum, the best approach is to buy strong stocks on pullbacks and hold them until the trend weakens.

Ultimately, the market’s rhythm determines the best strategy at any given time, and I always adjust accordingly to maximize my edge.

4. How is it different competing in a championship versus your own personal trading?

Competing in a trading championship adds an extra layer of pressure compared to personal trading.

In my personal trading, I can afford to be more patient, waiting for the best opportunities and accepting a lower return rate if necessary. My maximum drawdown per trade is usually no more than 0.5% of my account, and in most cases, it’s around 0.3%. This allows me to focus on capital preservation and long-term consistency.

However, in a competition, I have to balance aggressiveness with risk management within a limited time frame to achieve the highest possible return. In a strong bull market like 2024, it’s nearly impossible to rank among the top competitors without triple-digit returns. This means I have to use leverage.

Of course, leverage is a double-edged sword—if used carelessly, it can lead to significant losses. A major drawdown during the competition can be disastrous because, while others are compounding their gains, I could be struggling just to recover from losses. That’s why risk management remains critical, even in an aggressive competition setting.

That said, my core strategy remains the same: I focus on high risk-reward trading opportunities and strictly follow my trading rules. The challenge is to push for high returns while maintaining discipline—which is exactly what separates great traders from reckless ones.

5. How do you get out of a rut when you’re not trading to the best of your ability?

If things are going really badly, my first step is simple: I immediately exit all positions. This helps me cut off the source of frustration and regain a clear, rational mindset. I firmly believe that when I’m at my best, I can always recover losses—so there’s no point in forcing trades when I’m not performing well.

When I hit a rough patch, I typically reduce my position sizes and temporarily lower my risk exposure. This gives me room to assess what’s going wrong without suffering further damage. I review my recent trades to identify whether my decisions were flawed or if emotions were influencing my execution.

I also go back and re-read my personal trading rules—this helps me return to the basics and refocus on high-quality trade setups while filtering out market noise. Sometimes, stepping away from the market for a short period allows me to reset mentally and rebuild confidence.

Additionally, when I’m struggling, I take an even more conservative approach to risk. For example, if my normal maximum drawdown per trade is 0.3%, I’ll reduce it to 0.15%. This gives me more margin for error while I work my way back into top form.

The key is to stop the bleeding quickly, analyze what went wrong, and gradually regain rhythm without unnecessary pressure.

6. Do you have any advice for mindset or risk management for younger traders out there who just got started?

If you’re just starting out, you need to set the right expectations:

• You wouldn’t expect to train for a year and make it to the NBA. Trading and investing are long-term pursuits that take years to master. At the very least, you need to experience a full bull and bear market cycle to truly understand how the market operates.
• Mastery requires time. In any professional field, it takes 10,000 hours of immersion and learning before you transition from paying to learn to getting paid for your expertise. Understanding this will keep you from feeling discouraged during the slow, frustrating early phases of your learning curve.
• Even if you focus on short-term trading, think long-term. Ask yourself: What must I do to ensure my survival in the markets over the long run? What mistakes must I absolutely avoid?
• Reading about trading is like reading about swimming—it won’t make you a swimmer. You have to actually get in the water to learn. That’s why I strongly advise against trading solely in a demo account; paper trading doesn’t expose you to the real emotional pressures of trading.

However, just as a beginner swimmer wouldn’t train in the ocean or deep water, a beginner trader should not risk too much capital early on. Your trading capital during the learning phase should be small relative to your total net worth because rationality is a limited resource.

The harsh reality is that everyone loses control at some point. No matter how disciplined you think you are, there will be moments of recklessness, emotional decision-making, and irrational behavior. Even the most conservative traders experience this at some point in their careers. If you risk too much capital early on, a major loss can be devastating—not just to your portfolio, but to your personal life and family as well.

So here’s my most important piece of advice: Prevent this from happening at all costs. Ironically, most traders only truly learn risk management after suffering a painful loss. It’s only after a significant setback that they start prioritizing long-term survival over making quick money.

Key Takeaway: Rationality is a scarce resource.
During your learning phase, trade with an amount of money that, if completely lost, would not affect your lifestyle—yet is large enough to make you emotionally engaged. If I had to give a percentage, I’d suggest 5% of your total assets, but this varies from person to person. The goal is to have enough skin in the game to take trading seriously, but not so much that a bad stretch can ruin you. Surviving the game is the first priority because if you’re still in the game, you always have a chance to win.

7. What kind of recommendations do you have for people who want to do post-trade analysis?

Post-trade analysis is crucial for continuous improvement. I highly recommend developing the habit of keeping a trading journal. Document the following for every trade:

• Entry and exit points
• The reason for taking the trade
• Your emotional state and thoughts at the time

Regularly reviewing past trades helps identify the strengths and weaknesses in your strategy. However, one major mistake many traders make in their post-trade analysis is failing to consider the broader market environment. Most traders simply look at their trade in isolation—analyzing the price chart and assessing whether their decision was right or wrong. But if you don’t revisit the overall market conditions at the time, you’ll never fully understand the true reasons behind your trade’s success or failure.

For example, you might have made money on a trade, but what if the stock you picked was actually one of the weakest performers in the market at that time? That means your decision-making wasn’t as strong as you might think; your profit could simply be the result of a general market uptrend, rather than the excellence of your trading choices.

For a comprehensive post-trade review, I recommend doing it at least once a month. Personally, I conduct a full review at least once per quarter. This ensures that I stay aligned with my trading strengths and adapt to market changes over time.

8. Can you walk us through what you do on a weekend to analyze the market and find stocks to trade for the next week?

On weekends, I follow a structured process to analyze the market and prepare for the upcoming week. My routine consists of the following steps:

1. Review My Watchlist & Market Performance:
   • I start by reviewing my watchlist and analyzing how stocks performed over the past week.
   • This helps me identify which sectors showed strength and where the money is flowing.
2. Stock Screening & Sector Analysis:
   • I filter for stocks showing relative strength, strong price action, and increased volume.
   • I also check if there’s a group move—meaning multiple stocks from the same sector are breaking out together.
   • If I’m looking to go long, I focus on the strongest stocks within the strongest sectors; if I’m looking to go short, I find the weakest stocks in the weakest sectors.
3. Market Environment & Trading Direction:
   • I assess the overall market trend and leading sectors to determine if there are more long setups or short setups.
   • Based on this, I decide whether the upcoming week is more suitable for long trades, short trades, or a combination of both (e.g., buying strong stocks while shorting weak stocks).
4. Trade Planning & Execution Strategy:
   • Once I have my selected stocks, I set up my trading plan.
   • I define key entry points, stop-loss levels, and price targets.
   • I set alerts and reminders so I’m ready to execute when the market opens.

Proper weekend preparation allows me to stick to my plan during trading hours, reducing impulsive decision-making and ensuring I execute my trades with discipline.

9. What does your eye go to first when you first bring up a stock chart that you haven’t seen before?

When I first look at a stock chart, my attention goes to short-term momentum and volume activity—especially large spikes in volume, which can indicate institutional buying or selling. Volume fluctuations could be a signal of a trend reversal, so this is the first factor I pay attention to.

Next, I assess the overall trend—is the stock in an uptrend, downtrend, or trading sideways? Identifying the dominant trend helps determine whether the stock aligns with my trading strategy.

After that, I mark key support and resistance levels and observe the moving averages to see how the stock behaves relative to these indicators.

• Key Support and Resistance Levels: I mark important levels because these areas usually have the strongest buying and selling forces. If a stock has just broken through a key resistance level, it could be a buy signal; if it approaches a support level and shows a strong rebound, it could also present an opportunity.
• Moving Averages: I observe the stock’s performance relative to moving averages (e.g., 10-day or 20-day MA for short-term trends, and 50-day or 200-day MA for the broader trend).

Finally, I analyze the recent price action to ensure the stock meets my trading criteria before considering an entry. For example, if I am looking for a breakout trade, I will observe whether the stock price breaks through recent highs or key resistance levels accompanied by increased volume.

This quick assessment helps me determine whether the stock is worth further analysis and trading.

10. How important is concentration in only a few stocks at a time?

The importance of concentration depends on your return objectives and risk tolerance. If you’re aiming for very high returns, focused positions are crucial. However, there’s always a trade-off—higher potential rewards come with greater risk. Even with a solid stop-loss strategy, if you’re not day trading, you can’t completely eliminate tail risk (unexpected events that cause sharp moves against your position overnight).

If you’re comfortable taking on that level of risk, I recommend focusing on a few high-quality leadership stocks. But it’s essential that you:

• Deeply understand the industry and market environment surrounding those stocks.
• Have conviction that market conditions justify a concentrated approach.

From my experience, the best time to concentrate positions is typically after a major market correction or in the early stages of a bull market, when you can identify stocks that have both strong fundamentals and strong price momentum.

That said, concentration is a double-edged sword—it can amplify gains but also increases exposure. The key is knowing when conditions are right to go all-in versus when to diversify and manage risk more cautiously.

11. Do you go in all at once when establishing a position in a stock, or do you wait for the market to confirm?

In most cases, I enter my full position all at once at the moment I decide to buy. I believe this approach helps me mentally navigate market pullbacks more effectively. If I were to scale in gradually, my average cost would rise, making it psychologically harder to hold through natural market corrections. When I see unrealized gains disappear due to a pullback, many traders panic and exit prematurely—only to watch the stock reverse higher afterward. This creates additional emotional stress, as you end up regretting selling a winning stock too early. I prefer to avoid putting myself in that situation altogether.

That said, this doesn’t mean I never add to my position later. If the stock is trending strongly—especially if it’s rising at a 45-degree angle or still in the early stages of an uptrend—I may add to my position at higher prices if I believe it has significant upside potential. However, my additional buys are always smaller than my initial position, and as the stock moves higher, the size of my add-on positions gradually decreases. This way, I ensure that I’m participating in strong trends while managing risk at the same time.

YouTube: @jlawstock
Website: www.jlawstock.com