Saturday, February 13, 2010
I was very busy on Friday and so I did not get to open any new positions. However, I doubt I would have initiated any new positions on account of the early weakness in the market. What was surprising though was the strength shown in the latter half of the day by the markets. After seeing the early weakness I was getting edgy about holding over the weekend but the nice rally later in the day convinced me to continue holding. This is one of the traits I recognized I would have to develop in order to be consistently profitable in the markets; holding onto profitable stocks. I'm usually very intolerable with losses. So I have no problem keeping losses small. However, sometimes I'm too antsy about trades that are not initially profitable and have realized that I need to give them sufficient time to prove them selves, especially during strong up trends in the over all markets, as I have already defined my risk. Secondly, I realized that I have to be more patient with profitable positions especially when a new uptrend has recently begun. This anxiety to take profits has often caused me to miss out on huge profits in stocks that would other wise have been easy holds before violating one of my sell rules. So what I have decided to do is to hold through at least one pull back in initially profitable positions then move up my stop to break even and let the positions run and see wot happens while keeping a finger on the pulse of the overall market. Joshua Hayes from www.bigwavetrading.com has some excellent articles on this. In fact, it is his work that made me really come to this realization. So visit his site and read all of his interviews and review all of his past trades; entries and exits.