Staying on the Right Side of The Market Keeps You in a Good Mood!
Market/Trading Thoughts:I’m getting the sense (not “strong”…but persistent) that some here are a bit dismayed at the market decline today. When you are long to any extent, declining stocks are kind of a bummer. Even with stops that protect profits (or initial trading capital), you secretly hope that your stops don’t get hit.That’s the nature of trading.
However, I really have a different take. Proper positioning can elicit a different, more desirable and comfortable reaction when the market declines.
1. You first are disappointed that stocks aren’t going up every single day — if only!!!
2. You then are reassured that you’ve got some stops in place (you know, those things that so many commentators tell you not to use!!!). You see that you aren’t “losing money”. Instead, you are “exchanging stock for cash.”
3. You are almost enthused about having extra cash to put to work…at the appropriate time. This last phrase is important. Because you are cash-heavy, you are confident because you are well positioned. You are now sitting comfortably in your foxhole, waiting for the right time. But you are in no hurry. You are at an advantage because you are simply waiting for the decline to come to an end and provide an opportunity to buy stocks that you like at discount.
This is a bit like a family that celebrates Christmas on December 28th. Man! That’s a good deal — you get to watch the melee in the stores as people climb over each other to buy items that you know will be selling at a deep discount in just a few days after everyone else has already bought. You are well positioned!
4. You realize that trading for profit is not a single event, and it does not occur in a short period of time. Rather, profitable trading is a process that is comprised of a series of good decisions that outweigh the inevitable bad decisions that we all make (remember, good traders take losses, too! The great ones take them without hesitation!).
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If you got caught with your pants down (figuratively speaking, of course), don’t fret! Just learn from it. Figure out what you did wrong and then regroup. Write down your mistakes. Write down your constructive behavior. You want that stuff right in front of you.
By the way, my videos are my notes. I use a lot of repetition as a sound method of teaching and reinforcement of proper trading strategies for all of you. I want you to do well. I need you to do well! I take a personal stake in your success and am gratified when someone shares their success with me. I share the disappointment of those who struggle…and become even more resolute in my desire to help them turn it around!
But I probably benefit more than anyone. If you really want to learn something, then teach it! I’m a much better, more disciplined trader than I’ve ever been…because I preach it more than I ever have.
You can all do the same thing. I must compliment so many participants of this forum who have developed over the months and years to a very high level of competency, discipline and profitability. Those also happen to be the folks who share more of what they are doing, and why they are doing it!
It’s easy to say, “Hey, whaddaya think about XYZ?” It’s much more challenging to say, “I’m considering XYZ right now, and here’s why. Technically, …. Also, the fundamentals …. Seems to me that the business is…. Also, I notice that the sector is …. Am I missing anything? Anyone have anything else to add?”
When you adopt the latter approach, you are effectively “teaching”. You are teaching yourself…as well as others.
Hang tough on this very weak day. Trade like Elvis, who said, “Wise men say only fools rush in.”