Download the Schwab app from iTunes®Get the AppClose

Randy Frederick on Trading Strengths and Weaknesses

Randy Frederick discusses his thoughts on utilizing trading strengths and managing trading weaknesses.

Click to show the transcript

Well, I think it's important for a person to understand what their own personal strengths and weaknesses are. Some people have a very high tolerance for risk and they can make investments that might have a very big payoff, but, ultimately, could also end up in a loss, and they can just deal with that. Others have a very low tolerance for risk. What's really important, I think, is for a person to have spent the time in the market that has gone through both a bull cycle and a bear cycle, because a lot of people, I think, have a tendency to overestimate their risk tolerance during a bull market, and the reason for that is because they really haven't sustained any losses. If you've gone through a bull market and you've gone through a bear market, then you'll have a much better realization of what your true risk tolerance is. And one thing I think is true almost universally is that most people's risk tolerance is a little bit lower than what they actually think it is. And I think once they go through both cycles, then they'll have a much better understanding. But the key is to know what your weakness is, to know what your strength is, and to focus on the things that you're good at, and not worry about the things that you're not good at.

Schwab has tools to help you mentally prepare for trading

Learn more >

Talk trading with a Schwab specialist anytime.
Call 888-245-6864
M-F, 8:30am - 9:00pm EST

Get 500 Commission-Free Online Equity and Options Trades for Two Years

Learn More >

Important Disclosures

Past performance is no guarantee of future results.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions.

This discussion is provided for illustrative purposes only, and should not be considered an individualized recommendation or personalized investment advice. The strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation.


Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Any written feedback or comments collected on this page will not be published. Charles Schwab & Co., Inc. may in its sole discretion re-set the vote count to zero, remove votes appearing to be generated by robots or scripts, or remove the modules used to collect feedback and votes.