September 04, 2008 at 7:10 am | | Comments 2

Hit Singles for Satisfaction

The allure of swinging for the fence is common in the trading world, and it appeals to each of us from time to time. However, that sure doesn’t mean it’s the thing to aim for in our trading from week to week or month to month.

Rather than gunning for home runs at every at-bat, I’m content to hit singles, knowing that getting on base is the biggest key in this game. There are a few advantages and motivating factors to this mentality, so let’s take a quick look at them.

  • I do my best to avoid the “I don’t want to miss anything” mindset of a longer-term position trader by placing zero pressure on myself to participate in every move that comes along. For me, good trading doesn’t require that I catch the entire trend.
  • I don’t enjoy letting good profits evaporate, so I’d rather Take the Money & Run and ring the register in most cases. I might miss out on the occasional double or triple, but I’ve found that when strong trends are present, multiple entries will set up along the way. That enables me to trade the same stock a few times profitably even if I don’t sit in for the entire move.
  • I feel no obligation to stay with a position for the long haul. Ideally, I’m participating in the best portions of the move while having either zero risk (cash) or limited risk (tight stop) during those times when a rest phase or pullback comes along.
  • For most of my swing trades, I tend to set an entry, stop, and usually 2 profit targets. That lets me book some gains along the way to ring the register while staying on for a continued move should it come. It also helps me offset the urge to take a good trade off the table, so partial sales are definitely helpful for leaving on less and less exposure particularly when a move begins to get a bit extended.

You don’t have to be a hero every day with your trading, so take some heat off yourself and do what you can to get on base. There are a lot of Hall-of-Fame members who weren’t big-time sluggers.

Aim for consistent success in your trading – you don’t have to trade big to find it. Patient progress goes a long way not only for your account, but also for your emotional stability along the way.

Plus, those base hits add up quite nicely.

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

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  1. Jeff,

    I couldn’t agree more. Well said.

    The trader’s goal should be (in this order):
    a) Avoid disasters
    b) Earn money
    c) Create wealth


  2. Excellent points Mark, thanks for your comment and the brief (but all-important) list! I think a lot of traders mix up the order and pay dearly for it.

    Much appreciated and keep up the good work!


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