This is Part 3 of a series, be sure to check out Part 1 [1] and Part 2 [2] as well. New posts will be made during game days of the World Series.
Lose Small
With a base runner on and a batter at the plate, one thing we’ve come to expect in baseball is the sacrifice bunt. Rather than risk hitting into a potential double-play situation, a definite option is to force a fielder’s choice with a bunt. Doing this isn’t likely to result in more than one out, and it just might advance a runner and put him into scoring position.
In the trading realm, we’re often faced with the decision of choosing between multiple trades, some of which just aren’t cutting it for us. And it doesn’t have to be multiple trades, it might be multiple trading strategies which need to be reduced. In order to make net progress, we might give up a little bit of potential with one of them in order to focus more on the one which has higher odds of growing our accounts. Eating a small loss in one trade (or strategy) for the sake of managing a better-performing trade (or strategy) is never a bad choice. We’re putting our attention on something [3] that’s actually producing, and that’s the key.
Take One For the Team
Not every at-bat is going to be a glamorous one for the baseball players on TV, so when it’s time for the sacrifice play, it’s important to note that there’s actually some honor for the guy willing to lay one down for the better good of the team. Accepting a short-term setback in return for the longer-term health of the team (or your trading account) is wise. It keeps the ego out [4] of the equation [5], which is great because we want to be in the habit [6] of making good decisions.
So the next time you’re faced with a choice between a trade you’re hoping will work vs. a trade you already have working, be willing to cut the unproven trade first [7], and trust that losing small now [8] will mean winning big later. Your career just might depend on your adopting that mentality.
Trade well out there!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com [9]
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]