Wednesday, July 28, 2010

Cycles...

Although the markets and ROVI are currently pulling back, my years of trading experience tell me that this is a natural normal process. The markets including individual stocks move with ebbs and flows and not in straight lines. Right now the markets are experiencing a short term down cycle within what appears to the early stages of an intermediate term up cycle. The same can be said for ROVI and DTG. So I am still holding onto my positions in both ROVI and DTG as I believe that they both will see higher prices if it turns out we are truly in the early stages of an intermediate term rally. If it turns out this is merely a bear market rally then my stops will likely be triggered but a significant portion of my capital will be preserved to trade again when a tradeable rally does emerge.

I lacked the patience and discipline required to sit through short term pullbacks in the nascent stages of my trading career and so very often I would look back on stocks that I had had positions in a few weeks or a few months earlier and say, "Why did'nt I just hold onto that?!". Now I force my self to sit through at least one pullback in stocks that move up nicely from my buy point especially in the early stages of an uptrend. I know that many times I will get stopped out. But the huge occasional winners will more than make up for the many small losses and then some leading to a much higher expectancy than I have now.

Good luck with your own trading!

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