Thought For The Day

[flea]

"If it's going against you now and is a bad trade, I do not care what you paid, just cut it. The more you trade outside your risk parameters, your comfort level, when you are not in the comfort zone, the market is putting blinders on you and all you can see is the loss and you cannot see all these other opportunities out there. So you get handcuffed and you just ride losers into the ground. Whereas what you need to do is cut that loss and all of a sudden you're back in your comfort zone and starting over and can move on to the next trade and try to dig yourself out of the hole rather than having to try to hit a home run to get out of the hole."

- Alpesh B. Patel, Financial Times Columnist

 

[Turbo]

I thought I might repeat this here (previously posted on another thread):

Trade for success, not money.

Your motivation should be first and foremost to make a well-executed trade. If money alone is your motivation you will severely limit your chance of success. Why? Because focusing on money will raise all kinds of emotional issues, from fear to greed. It will make you afraid of losses to the point that you will abandon your discipline. It will tempt you to trade too often, to large, and with too much risk. Whereas if you focus on making solid, well-executed trades - even if the result is losing a trade that you exit quickly - you will reinforce your discipline and increase you trading potential. Lewis J Borsellino

Taken from the 'The Global Book of Investing Rules' which I have just purchased.


TurboCharge

 

[Riz]

Thanks guys...by the way wouldnt it be better if we just add to the same thread instead of starting a new one every day?

Riz

 

[flea]

One thread

I can do it that way, I just thought that a long list of trading quotes may be a little dull. If you have lots together they can loose their impact.

Does it cause problems to start a new thead each day? If so I will post them all on one thread.

Regards

Flea

 

[Riz]

No, it doesnt cause any problem...I thought 1 single thread would help when feeling like backreading them or for newbies, more handy, just a suggestion...do whatever way you feel better though...

Riz

 

[flea]

Good point

On reflection I think you maybe right Riz. I'll start a new thread tomorrow and post them all on that thread

Regards
flea

 

[ibet]

Turbo, Trade for success and not money and a well-executed trade etc. What does this really mean and what good is it ? Some trade which you think is good can quickly become the reverse and some thought bad can quickly or sometimes very slowly reveal themselves to be good.

 

[Turbo]

ibet, I guess what he's saying is that too often we end up 'chasing' stocks that we are only going lose money on. This happens when greed clouds our judgement, and we begin to visualise mountains of profit.

Our primary aim should be to succesfully identify companies that have a good chance of doing well based on research. If a share is dropping and our reseach suggests that there is little prospect of recovery, then the correct thing would be to exit from that trade, rather than allowing the the loss to grow. This is easier said than done, for too often we liable to carry on holding on to the stock, hoping and praying it will recover.

So if you have learnt the art of executing a trade well, then the fact you will make profit is a foregone conclusion.

I'm not sure wether this makes it any clearer.

 

[titus-uk]

I think that what its saying is that you should treat a trade as an intellectual challenge that has the opportunity of making you money, than the other way around. Emotions are the enemy of technical analysis, as fear and greed are so strong they oppose clear thought. If you want to look at irrationality, look at some of the ADVFn threads on MONI, EGS etc. Focusing solely on financial profut/ loss is the quick way to bankruptcy.

Mark

 

[Riz]

Hi Mark, nice to see you're back about again

Riz

 

[titus-uk]

Cheers Riz, good to be back.......had a break, and have then been doing a lot of rethinking of the way I trade......no system is ever 100%, but I am optimistic that in whatever market, I will be better equipped to win.
I will be around more often....love the new setup - Sharky, excellent job you've done, and some fantastic contributions from contributors new and old.....

 

[Sharky]

Thanks Titus,

Glad to see you back on the boards. I've been adding a few bits here and there, but behind all the gloss its the contributions of the members that keeps us going!

 

[Riz]

Sharky being modest as usual, but we all appreciate the endless efforts he's been putting to make it the best around

Riz