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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Michael Watkins who wrote (6452)	3/21/2001 8:39:08 PM
From: Lazarus_Long	Read Replies (2) \| Respond to of 8925

LOL!! But it hurts to laugh! Don't we ALL know this story: Invariably, if price went against me, I'd find some rationale to justify staying in the trade. They might include: - 'oh, the next support (or resistance) level is near by' - 'oh, on a percentage basis its not gone that far. I can tolerate more pain' - 'oh, man this one when it reverses will really ramp (or clunk) so I'll double my position to make up my losses so far' [I get shivers thinking about that one!] - 'uh oh, its still going against me. stare at wall. wonder why I didn't put all my money in mutual funds. stare some more. read commentary all over the net as to why XYZ was a good thing to be long or short' - ... etc.... Price being diabolical, it would continue to go against me. More often than not I'd forget my mental stop 'promise' made before the trade, and instead I'd bump my stop a little farther away, and firm my resolve to exit the trade if price moved through there. Little did it occur to me that my thesis for picking the direction being totally wrong, price would of course continue to go against me, far more often than not. This painful and emotionally draining and demoralizing process would continue. After hitting the 'deer in headlights' phase, at some point I'd snap out of it and exit the trade, at the market no less at some horrible fill. Naturally, my fill would be almost the exact point at which price would stop going against me... inflicting both the largest possible financial loss and a big emotional stab in the heart. And the bad news is that even after you've paid the tuition and learned the lesson, you can still commit this sin!