My Mistakes....
2. I rarely bought at the LP, instead buying after the market had begun to accelerate. This caused even the smallest shakeout or reaction to hit my stops, usually for a loss.
3. On several occasions I held on to stocks way, way after they had dropped below their exit points because I didn't want to take the hit to my account. Keep in mind I entered at the wrong places to begin with, so I didn't even have the cushion of a little profit from the LP to help ease the blow. It got to the point twice where I didn't even want to look at the price daily because I was afraid to see how much more I had lost. Finally I closed those losing positions, and as many will probably guess, they proceeded to rocket back up from a very oversold position
4. On the occasions when I was holding winning positions, I would monitor the positions throughout the day and often would close out what was a good choice on a small shake out. You can only determine what is a small shake out IN RETROSPECT. While it is happening it will look like the bottom is falling out, and you will panic every time. Many of those positions went on to be over 100% gainers AFTER I got shook out of my position. This is a very hard habit to break. Even now, I fall back into this habit from time to time. I owned #B last year, and although I took a reasonable profit out of it (37%), it is now up over 150% from MY purchase price. One could argue I actually made a reasonable decision to sell just before the big decline in October. You will never get 100% gains thinking like that though. The problem is then compounded because I never bought back in when it crossed back above the 10WMA (classic BTT repurchase).
5. I was too impatient to enter the market when I had extra cash, and would make purchases at non-ideal times. This would lead to buying a stock way above the LP, often when the market was beginning to be overbought. According to BTT the lowest risk times are when the market is moving from stage 4 to stage 3 or from stage 2 to stage 1. This only happens a few times per year, if that. It can be hard to wait.
6. I didn't follow any of the BTT rules. |
