Thanks MD,I realized that cutting losses early was the way to move forward. This has stuck with me ever since, and today if a stock moves against me, I'm out, it's as easy as that. Sure I miss some opportunities, all the time. I don't beat myself up over it, I just move on, or re enter at a better time. The stock has to make me money from the moment I buy it. That's it for me, that's a rule I live by everyday. It takes real skill to lose small amounts of money often.
A piece of advice from Phil Carret’s The Art of Speculation:
If you have 1000 shares of a stock worth currently, say, $9, disregard entirely the price you paid for it. Rather ask yourself this question: “If I had $9,000 cash today and wished to buy some security, would I choose this stock in preference to every one of the thousands of other securities available to me?”
If the answer is strongly negative, sell the stock! It should not make the slightest difference whether the stock cost you $5 or $13.
Your entry price is totally irrelevant, but the average punter gives it considerable weight.
To stop looking for the perfect setup................
... Hope you enjoyed the read.
I enjoyed the read! But, pray tell, how did TulipFX spot that you had a good history to relate?
Pixel,Thanks MD,
You've made a terrific journey and presented it well.
It takes real skill to lose small amounts of money often
In theory I want to be a longer term investor, but I keep looking at the prices of my stocks every day and it influences my mood. Like with Karoon Gas. Absolute roller coaster and I get pissed every time the price drops, but need to just remind myself about the long term, sitting on potentially great deposits etc. But gee it's tough. I guess this is my inexperience showing through.
Another is that I get caught up in the hype and end up holding on too long, like with Harvey Norman in 2007.
Hi c-unit,
Have you considered learning how to do point and figure charting? This can remove allot of the 'Price Noise' your seeing on a daily basis. Some would consider it 'Old Fashioned' in todays marketThough I still use it even to this day
I do not know of these concepts.
Are they even remotely similar to moving point averages?
I do not know of these concepts.
Are they even remotely similar to moving point averages?
Hi Burglar,
P&F Charting is very Similar to moving point averages, but less math involvedKind of like 'Shorthand' for price action in stocks or FX or anything really. It's been around for well over 100 years, was one of the first books I read actually, but I'm not that old
Have a read here, should explain the concept all be it briefly.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysisnf_charts
Renko charts can be explained here: http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:renko
... It's been around for well over 100 years, was one of the first books I read actually, but I'm not that old
Ahhh, the beauty of books ... still readable after our forefathers (authors) have died.
Hope you enjoyed the read.
Everyone has weaknesses. Things we should be doing better. Some recognise them and attempt to work on them. Others perhaps do not see the problems, which could be a bigger issue then the problem itself.
So in your trading - what's the one thing you could do better?
What are you doing to improve this part of your trading?
My weakness is losing faith in my systems. I can historically test and know bad periods can occur, but when it is real money which is being lost I can begin to doubt my system and look to tinker with it.
While tinkering and (hopefully) improving can be good in itself, I have in the past dropped systems after a rough patch, missing the upcoming good results.
To help me against this I have better defined the expected 'down periods' so when they occur I can compare them to what I expect. If they are within expectations then I can 'not worry' knowing that the expectation is that they will soon come good. I can not worry because I know at which point I should become concerned - and logically if that point is not reached then I need not think something is 'wrong'.
What are you looking to improve on in 2011?
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