My streak of not getting sick over the past few years has been broken. I’ve fallen ill, a victim of the sinus bug that attacks the throat, makes you sniffle, and clogs your ears so everything sounds like you are listening to a 1995 Sony Walkman under the water. So if I see you over the next few days, talk into my right ear, and speak clearly.
While my health is suffering, my trading has not. I’m on a roll. I don’t want to spend too much time talking about it, for I will certainly jinx myself. We are in an environment where dips buys are being rewarded, and handsomely.
Lately I have noticed more and more that traders struggle with one thing in particular: Holding on to winners. It is something I needed serious coaching with when I began. I see traders in our room getting into positions, grab a quick gain and then ask 5 times when to exit. First, always make sure you have an exit strategy before getting involved in any trade. Second, if you went through the hassle of planning a trade, taking the risk of putting the trade on, and then seeing a gain blossom, don’t you want to stick around and see it through? I see time and time again someone put on a position and then it’s almost as if they go out seeking bad news on the stock to talk themselves out of it.
“Trader Joe is long Oct 13 $GOOGL calls at $1.50, currently trading at $2.00”
Instead of watching the chart, which is what he used to enter the trade, he switches over to Twitter to see what others are saying about the stock, or worse yet Stocktwits. Do you think anyone on ST knows? Fuck no they don’t. They probably don’t know their ass from a hole in the ground let alone what $GOOGL is going to do over the next couple of sessions. You got in a trade that is working. Do yourself a favor and let it work.
I have to get back to nursing my failing health now, but I will leave you with this. Remember it, print it out, save it. Know it.
Until better days,
OC