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February 19, 2007
In this
week's free newsletter, we'll take a look at something we can all use a little
more of from time to time:
Patience.
Maybe I'm just a little too Type-A
sometimes, but when I get behind the wheel of a car, the search begins to find
not only the fastest route but also the fastest lane.
The car I drive is pretty fun to
zip around in, but honestly I don't think that has much to do with it.
After all, I was the same way with far worse equipment several years back.
I think my personality just lends itself to some bouts with impatience.
Not surprisingly, my impatience impacts more than just my driving habits - it
often impacts my trading.
You might be more patient than me
most of the time, but I would bet there are plenty of occasions in your trading
career that you jumped the gun and it cost you.
Consider these common
symptoms of impatience:
Maybe you were impatient to
catch a breakout from a continuation pattern, and your early buy left you
with a stock that never cleared the technical buy point, drifting lower and
costing you money in the process. No fun!
Maybe you tried to call a top or
bottom, and your overly anticipatory approach left you holding the bag as
the move you thought was ending only gathered more steam, rolling you over in
the process. Ouch!
Maybe you've caught a good trade
but lost your patience with it as it works slowly in your direction but not
fast enough to satisfy you, so you bailed out too soon from what ended up being
one sweet move. Man, I hate it when that
happens!
Every one of us has made these
mistakes, so you're certainly not alone!
So, how do I deal with
impatience as a trader?
Remain Impatient With Losses.
This is the one time that we WANT to be impatient! A losing trade is
giving you great feedback, even if it isn't the desired kind. Those red
numbers are telling you that there is opportunity elsewhere, so heed the advice.
Being vigilant with your money and protecting your capital at all times means
being impatient with losses, so when you're wrong bail out quickly!
Give Winners Some Space.
Finding winning trades is nice, but it isn't the key to big profits.
Staying with those trades IS the key. So when you find yourself in a stock
that is showing a gain but doing it slowly, do your best to stay with it and
give it a little room to move. You're right in the trade, and the only
question now is just how right are you? Give it a little time and a little
room so that you can find out for sure. You just might be in your best
trade of the year and not know it yet, so don't let impatience take you out of
it.
Let The Pattern Play Out.
Whether you're stalking a trade or already in it, letting the chart pattern play
out will give you the highest odds of success. For entries, it will
prevent you from jumping the gun and trying to enter a trade which technically
has not yet confirmed. For existing trades or exits, the price projections
that result from a pattern will give you levels to shoot for, making it easier
to just execute rather than worry over every tick and impatiently bail out too
soon.
Remember, great trading requires
some sitting and waiting - it isn't all about jamming on the buy and sell
buttons all day. Cultivate patience and commit to it, and in the end
you'll be more profitable as a result.
Grab Some Profits With Us!
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"I have learned more here in 6 months
than anywhere. I have never heard anyone break down the markets with such
clarity. Jeff has a way of shedding some light on the big hairy monster
and making it much less intimidating" - Chuck B., Alabama
COME TRADE WITH US!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
The Stock Bandit, Inc. - 17460 IH-35 N. #160, PMB 240 - Schertz, TX 78154
Copyright 2004 -2006 The Stock Bandit, Inc. All Rights Reserved
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