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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (6350)	2/26/1998 1:50:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

Yes. I like moving around between different thread, but I always manage to return to this thread. I have been trying to help this very intelligent 12 year old understand the difference between speculating and investing from the perspective of the risk that is undertaken and how manageable that risk can be made to be. This can also be used to describe the difference between the short term trader and the "speculator" that is more akin to a gambler. What is one person's risk is another's manageable opportunity. This depends on their relationship to risk and how well they understanding themselves in this way, in how they approach and respond to risk. What dramatically increases the risk related to an approach to the stock market is the risk the person is unaware of themselves taking on. In other words, it is one thing to know what you understand and toknow what you do not understand. Each is defined and therefore can be acted upon. The substantial risks are likely to come from what we do not know we do not understand. Than an accounted for variable in their trading approach rears its ugly head and bites them in the ass like a change in the market when their approach unknowlingly is based strictly on a very strong bull market, which is an approach that requires a static picture of the market. But then when this happens it is easy to see as a "one time" infrequent event or due to "market manipulation" and continue on what we were doing. If we do not stop at this point, perhaps even exit our positions depending upon what happened, and spend time to think about what happened, the changes we do make will have no effect and we will make the same mistakes which may incur a much greater loss the next time around. Sometimes I think I post too many thoughts in one post for this young person to feel comfortable in handling. I hope his father is helping him through my posts. I am trying to help him see that short term trading is different from the invetment approach he is more familliar with which is also different from speculation as far as taking on significant risk for quick profits. I do not think sucessful traders see themselves as "speculators". Their relationship to risk is different from most other people in the markets. Bob Graham