5 Expensive Words
Rarely do they pay off, and yet we’ve all said those 5 costly words……
“just a little more room.”
Whether it’s been on the winning side of trades where I’ve tried to squeeze the last $0.50 out of a stock, or it’s a losing position that has been trying to tell me I’m wrong (those numbers are RED for a reason!), I am guilty!
Oddly enough, as cheap as it is to enter trades with commission structures so affordable, have you ever noticed just how expensive it can be to stay in a trade?
We all know the rules….
• Obey thy stop!
• Never Believe in your stock!
• Don’t let a trade become an investment!
…..yet it is so easy to break them. It’s a solitary job, and the only person to prevent you from compounding your mistakes is the one you see in the mirror.
So, be your own ally. Have a trading plan in place before you login to your account. Do your homework. Set hard stops as soon as your orders are filled, and let those safety nets keep your losses small (we all know how easy it is to blow a mental stop).
Be smart! Trading is about real money, not just flickering numbers on a screen. Be prepared and protect your capital at all costs. That guy in the mirror will hold you accountable the next time you see him!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
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Black | Apr 12, 2006 | Reply
Hi Jeff,
Sound words but unfortuntely not many people can run their trading like a business. I suppose that is why there is money to be made in trading.
Best regards
Moritz | Apr 17, 2006 | Reply
don’t trade unless you CAN treat it like a business would be my advice.
Andy | Apr 24, 2006 | Reply
Simple but probably the most important thing you can do.
I’ve found that using stop losses on every trade from day 1 has drilled me to do it without thinking. It has just become second nature to calculate where my stop will go before deciding position size.
Discipline!
Administrator | Apr 24, 2006 | Reply
Great input guys, thanks for your comments. I certainly agree….trading is a business, and implementing stops habitually is the best way to always keep your risk in check.
Jeff