Archives of “February 11, 2019” day

rss

Intellectual Flexibility

  
  Education
#  #  #  #

There is a difference between what you think it should happen and what ultimately happens, especially in the short-term perspective where supply and demand are defined not by fundamentals, but by fear and greed.

However strongly you believe in something and however coherent the case is, you need to be:

(1) willing to accept that you might be wrong, and

(2) able to take the position off even though you might not be wrong in the medium-term sense.

Market is like a woman

  
  Education
#  #  #  #  #  #  #

One is amazed by the similarities between the market and the femme fatale. Especially when you continue to chase the market with expectations of a reversal that never comes.

The more you chase it, the more parabolically it goes up. No matter how you count or look at indicators and candles, it simply goes up. When you finally give up, that is when the market surprises you once more with a sudden reversal and drop of prices.

In same way, you chase the femme fatale and that keeps you hooked and brings you near self destruction and obsession. When you finally give up exhausted and frustrated, she gets back at you once again. Looking for her prey…

Tony Oz Trading Wisdom – The Stock Trader

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #

Tony Oz: ‘The Stock Trader – How I make a living trading stocks.” Page 163-164

[…] The thing that drives me crazy about traders is that they always tell you about a great pick they had, and how they have left so much money behind. It is always about how much money they leave behind. I used to participate in these conversations myself, and I would share my grief about the trades that got away from me. In fact, I would even do so unintentionally while teaching a seminar. Now, every time I am about to tell a story about a trade that got away from me, I take a deep breath, and I tell myself, “No one really cares!” As they say,”Misery loves company.” You might be in pain for letting a big winner go early, and you feel you have to tell the world about it. It is not going to get you anywhere. Stop feeling sorry for yourself. It is impossible to be right all the time. When you are right and you have not capitalized on being right, you are simply wrong.

One of my dear friends bought XYZ stock at 70. The stock went up to 85, and he sold it. He never told me he was in the stock prior to him selling it, and after the stock has already declined back to 75. He was so proud of himself, because he bought it at 70 and sold it at 85, especially after the stock dropped back to 75; consequently, he did everything right. He then said to me, “keep an eye on it and buy it if it trades higher than 85. I have a stop buy order on it at 85 1/2 myself.” I never really followed XYZ stock; however, every time I spoke with my friend he would say, “did you see XYZ stock today? It went up a couple of bucks. It is my pick of the year!” A few months go by, and XYZ stock took out the 85 level. It was now at 180. My buddy is glowing. “I told you, it is my pick of the year,” he says. XYZ goes up to 240 and announces a 3 for 1 stock split. “It is my pick of the year,” my buddy says. The stock ten folds, it was a great pick. My buddy was right.

No! He was wrong! Although he made a great call, he never bought XYZ back once it hit his buy target! It was his pick of the year, and he has zero dollars to show for it. Moral of the story, put your money where your mouth is. Do not use the “I should have done…” phrase. Only speak about your actions, learn from your profits and losses.

Go to top