| | | This is why in the past, I have thought that people should start out as traders. As a trader you need to learn how to position size, know when to cut losses, when to add and when adding, know whether to do so in small increments or large.
People sometimes laugh when I tell them one of the most valuable things for me as an investor was my experience as a horse trainer.
When you train, the money you actually make from people paying you to train their horses is a relatively small % of the total. Sure, it keeps some traffic coming through the barn and helps a bit with the monthly cash flow but the real money is in buying a horse, training it for a little while - or just having a possible buyer lined up before you ever bought it - and selling at a profit.
I used to tell people that my financial success wasn't based on the % of right vs wrong calls I made. More than anything, it was quickly recognizing I'd made a wrong buy and get that horse out of my barn quick, even at a loss. Every day it was in my barn it was eating my feed, using up my labor, and taking up a stall that might be used for a horse I could turn a profit on.
This was very good prep for buying a stock and after a little while realizing I was wrong about it and selling. I got pretty good at cutting my losses. And I never understood people saying, "I'll sell when I get back to even." Take your lumps, sell at a loss, and rather than having your capital tied up in a loser, put it into something that will make you money.
Though trading SDRL almost daily in mid-2017 was entertaining. ;) |
|
