I guess thats why we are still doing this for a living, and the "multi-trade guru's" have gone broke or given up!!
You have made a superb point that I wish to reiterrate to the masses;
If I don't see a good opportunity I refuse to trade for the sake of trading.
Being a daytrader doesn't mean you have to trade everyday, nor meet a quota. I highly recommend Dr. Alexander Elders Book "Trading for a living", it is my trading bible, quite honestly!
Using your example of a young lady losing $20,000 in 6 months. The very first thing I would have recommended to her was to quit daytrading for one month. Go over all your trades and try to find out why you are losing money. Once discovered, throw out your old strategy and start fresh!!
here's another very true statement!
90% of all bad trades are emotion driven! Rather than common sense and reason
Here are the oneliners that can kill you
1) I gotta have it!
2) If I don't buy now I'll miss it!!
3) Even though there is no indication of a bottom, I know it'll turning around right after I buy it!!
4) They gotta go to the moon, they have a terrific product
5) Buddy told me its going up a buck today!
6) It just pulled back .10c its cheaper now.....buy!!!
The list is endless, but all are based on your emotions, none are based on the present performance of the stock!!
In a previous post I addressed my "present luck" with reversals. I think the one thing I failed to mention is that, I continually evaluate how much profit I am happy with. I do this well before I buy, the reason is simple. EVERYONE, wants to be the one that sold when the stock hits its peak, this won't happen 99.9% of the time. If you have not determined a "comfortable" profit level, then you will get wrapped up in the euphoric rise of the stock and try to push for that last nickel, in the end you lose if you do!
As a stock rises beyond my expectations of profit, I tighten the stops, this has tossed me out prematurely ....but not with a loss, just a greater profit than I expected. Keep things in perspective!
the Chief |
