Insightful comment this morning from hedge fund trader, Todd Harrison, of RealMoney.Com (The Street.Com)
A Matter of Timing
2/09/01 8:59 AM ET
One of the most valuable lessons I've learned in trading is the process of damage control. Every trader has a different method, but what I want to stress to you is the timing aspect. Everybody has bad trades; it's a function of what we do for a living. However, sometimes it pays (literally!) to exhibit patience in the unwinding of such trades.
I know this may seem counterintuitive to "strict stops," but this business is about augmenting and remaining flexible while adhering to your discipline. It's a fine line, that's for sure, and it's not something that comes naturally to everybody.
Remember, when the market was up appreciably in January, nobody felt like they owned enough stock. As we come for sale, those same people feel like they own too much stock. You can't have it both ways, my friends. Remember the angst of today in the green of tomorrow, and use the strength to lighten up if you're feeling overexposed.
There will be many more days, and many more trades. You just need to play within your means. |
