"In my view, an appropriately sized initial position is no more than 5% of your overall portfolio. Once you get your trade confirmation, all the analyst reports and newsletterrecommendations become moot. As we've pointed out in the past, after the first trade is made, it's all in the follow through. Your job isn't to research, but react."
For me it's also important that I have plenty of margin left to gain some flexibility and peace of mind. Nothing worse than being all in and a position going against me. Also if the price is hovering around a level and "feeling" or looking topish it's good to be able to increase a position. At least that's how it worked for me yesterday.
"investors should think of "taking" as another word for "stopping." Take a loss and you've stopped it from growing. Take a gain and you've stopped the exact reason you got in XYZ in the first place."
Yes. I always just see the 200$, 300$ or even 400$ and think that's enough for this trade, or that's pretty good for 2 hours or 20min or whatever. But I miss the point that there will be losers and I won't cut them off in most cases until they are 500$ or 700$ or even larger!!
I also change my mind on the fly about the length of time I want to hold on to any given position. If something is just going one way pretty fast and in my favor I can hold on for more pips. But if it's going slowly in the desired direction I just get fed up and pick a certain level - either price or in pips - where I am happy to get out.
With my losers I tend to want to double up. This will work in many cases if the market is in a trading range as it tends to go back to middle of the range :) . But as I saw 2 weeks ago, the day you catch a 300-400 pips move at the wrong end and start scaling in over 12-18 hours you can get seriously hurt.
I think this is also the reason the move out of range will be hard and fast in EURUSD in coming weeks. At the moment it's a good bet to buy 1.3850-39 and sell 1.4050-1.41. But that will change, no question.
I also change my mind on the fly about the length of time I want to hold on to any given position. If something is just going one way pretty fast and in my favor I can hold on for more pips. But if it's going slowly in the desired direction I just get fed up and pick a certain level - either price or in pips - where I am happy to get out.
With my losers I tend to want to double up. This will work in many cases if the market is in a trading range as it tends to go back to middle of the range :) . But as I saw 2 weeks ago, the day you catch a 300-400 pips move at the wrong end and start scaling in over 12-18 hours you can get seriously hurt.
I think this is also the reason the move out of range will be hard and fast in EURUSD in coming weeks. At the moment it's a good bet to buy 1.3850-39 and sell 1.4050-1.41. But that will change, no question.
"Because a big part of trading is not trading, you'll need a few nonmarket activities to keep your finger out of the fudge pot. "
I've also noticed since my "winning" streak is back on (4 days in a row) that only checking from time to time has done me a service. I get suckered into trades that don't make sense but that I'd enter just out of boredom or something like that.
source of quotes: http://www.smartmoney.com/investing/stocks/let-the-winners-run-12602/
Saturday update: No trades yesterday. The one thing I did feel strongly about was buying around 1.3900, but then didn't and watched it go up 30 pips :S Never mind. Next week will bring tons of new opportunities :D
No comments:
Post a Comment