Food For Thought: The 5 Most Deadly Mistakes Of Trading
Q: It all boils down to #3, dropping a profitable trade. Large trading losses are always - not a stock dropping (there are safeguards), they are tremendous gains not taken advantage of, getting out, then seeing it rise.
A:
A short term hold for me is a few days, so my remarks about this may
be irrelevant to daytraders; but I think of the market as a huge
number of possible opportunities and try to only take positions
in the long or short candidates that I feel the strongest about.
It would be very rare for a stock to quickly transition from
being a long ca
positive about - to a short candidate a stock that I feel most
strongly negative about. By the time one feels that negative
they should already have sold awhile back, in most cases.
It's true that you only sell if you think it's likely that
a stock will go sideways or down. But you don't short
all the stocks where you have that feeling or go long
all the stocks that you have a slightly positive feeling
about.
I do agree with the idea that one's idea about the stock are better
calibrated forstocks that you have been watching, in one way
or another.
Trends are nice, but sideways has been very healthy for my trading. June
percentage wise was the best month of the quarter(+56%). I would love to have
many years of Junes. Since markets move 70-80% of the time sideways,
I have more to come. You must remember I'm heavily leveraged to the
tune of 17-1, and if you throw on the straddles and strangles 4x minimum
of that.
Follow a dozen or so from the DOW 65. You will get a cross section.
Now I only picked the Dow because Dow stocks are the last to fall.
Greed in the NAZ shouldn't be your friend now.
That's what I do when I look at individual stocks, chart patterns.
I focus on the futures since they have a longer trading day, leverage and
lead the market.
My charting systems currently track 2,025 stocks. Of those, I owned
shares in 133, as of the close of business Friday July 7, 2000. I check
up on all of the ones that I own, not only individually but in portfolio
summary, every evening. I also pay particularly close attention to those
which are starting to flirt with me from near the buy points which my
portfolio systems compute for me for 723 of the better quality and better
value stocks in the 2,025 stock universe I track. I pay even closer
attention to the few of my 133 owned stocks at any given time which are
nearing their computed "full value". So I have been feeling sort of like
a whoremonger visiting a monogamessy Xian church (you know, those
infantile places where they insist that you only read one book in your
whole life and never have more than one real relationship in your life
with anyone of complementary gender) while reading some parts of the
thread "Ignoring your friend".