User @MacZaddy requested a BigShort user-generated library. Everyone sharing their favorite trading books for others to learn from.
So it's only fitting that his favorite is the first addition to the library: Think and Trade like a Champion by Mark Minervini.
Summary
We've summarized key points below so you don't have to read the whole thing. If it touches on topics you want to master, consider getting a copy to go deeper:
Develop a Clear, Actionable Trading Plan
Entry Rules: Identify specific technical setups, such as breakouts from price consolidations on high volume.
Exit Rules: Set predefined profit targets and clearly defined stop-losses to limit risk.
Position Sizing: Never risk more than a small percentage (typically 1-3%) of your total account on any single trade.
Consistency: Always follow your rules. Discipline separates profitable traders from amateurs.
Prioritize Risk Management
Protect Capital: Focus first on potential losses, then on gains. Winning traders understand that avoiding significant losses is critical to long-term success.
Stop-Loss Discipline: Use stop-loss orders immediately upon trade entry. Set these at logical points based on technical levels (support, recent lows, volatility).
Risk-Reward Ratio: Only take trades where the potential reward significantly exceeds risk—typically at least 2:1 or better.
Maintain a Trading Journal
Detailed Records: Log every trade: entry/exit prices, stop-loss placements, position sizes, and reasoning behind each decision.
Performance Reviews: Regularly analyze your journal to spot repeating patterns, strengths, and weaknesses. Adjust your strategy based on insights from this analysis.
Emotional Check-ins: Record your emotional state during each trade. This practice helps identify emotional biases and improve discipline.
Identify and Trade High-Quality Stocks
High-quality stocks typically have these traits:
Strong Earnings Growth: Look for stocks showing accelerating quarterly and annual earnings growth (ideally 25%+ quarter-over-quarter).
Increasing Revenue: Consistent and rising sales growth signals fundamental strength and expanding market share.
Relative Strength: Stocks outperforming the broader market—especially during market downturns—often continue outperforming.
Leadership in Sector: Prefer stocks leading their sectors or industries, often hitting new 52-week highs or near them.
Institutional Sponsorship: Stocks being accumulated by institutional investors (mutual funds, hedge funds) often gain momentum from ongoing institutional buying pressure.
Cultivate a Champion Mindset
This is how top traders think and behave:
Commit to Constant Learning: Never stop improving your skills. Read, analyze mistakes, and seek new insights regularly.
Stay Objective and Detached: Base trading decisions on logic, data, and your system—not emotional impulses or biases.
Embrace Setbacks as Opportunities: Treat every loss or mistake as valuable feedback. Learn from it, refine your approach, and move on without lingering negativity.
Visualize Success: Champions regularly visualize executing their trading plan flawlessly. This practice builds confidence and reduces hesitation when it matters most.
Maintain Discipline Under Pressure: Practice patience and adherence to your trading rules, especially during volatile market conditions or losing streaks. Discipline is the bedrock of consistent success.
If BigShort traders resonate with these principles, the full book provides even deeper insights, case studies, and specific methods to implement these strategies successfully.