Tuesday, January 09, 2007

Keeping a cool and level head

As I see my holdings sky rockets off, I admit greed grew in me. I began to envision that they will gap up everyday and when I am looking at the quotes, I am calculating my paper profits. Wrong Wrong Wrong! This is self Sabotaging. By counting the chickens before they hatch, my psychology will be affected and will eventual lead to reluctance in taking profits or worse still, let my profits turn to loss and do nothing. I know it too well because this was an old mistake I never want to commit again. I was tempted to click on the link to check my total portfolio profits but I force myself not to do it. Instead I spend the time doing my work and only check back once in a while to decipher the market sentiment and not just focussing on "wah my stocks fly!" "wah i make so much money" or "wah i so smart, i am very good" Believe it or not, i use to do it. What a stupid way to feel good! This is one way to lead to egoistic behaviour in the market. Back in those days, i will be very excited and will feel very smart when my stocks rally. Not anymore, because the market punished me heavily and I know how important it is to plant my foot firmly on the ground. Maybe I'm getting older hence understood there is no need for that. Trading should be treated like a business and we should be concerned abt growth and not short term gains.

The second thing that flashed across my mind was how to make more money! Yes! Greed! I am making very consistent profit and now I am dreaming of getting rich faster. I shall not fall into such trap! I knew because i have the knack of sending back all my profits to the market after a string of good runs. I have a trading strategy that is working for me and giving me consistent profits. By buying the right size, my psychology stayed level and my account grew. If I were to buy a bigger size than what my psychology can accept, my account is doomed. I read that inorder to upgrade your trading size, it is better to have already doubled or trippled your trading account first.

A friend discussed Genting with me and was shocked why despite being a trader, I did not profit from Genting. Here's my reply, the kind of movement by Genting is uncommon. The probability of it happening is not high. My style is to trade in more constant and predictable movement. That is the easiest way to win money. When the indicators is where we want it to be, market direction is clear, stock selection is good, you should be able to make money most of the time. HSI for example, from July'05 to Dec'05... I have traded HSI only 9 times and profited all 9 times! The 9 times I traded are nothing fanciful, just purely low risk high reward and high probability trades.

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GrowMoney QuickPick
Labroy Marine
*Students from Cracking the Stock Market Code, feel free to engage in discussion about my quickpick in our Alumni mailing list. All should try to identify the support and possible resistance for Labroy before buying.

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