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.I am trying to get rid of them, or I'm reevaluating whathalf or three-eighths of a point.put me in them in the first place." In reevaluating, Ric remains flexible.It matters to some traders what stocks they make money on.If they A decline could create another opportunity to add to a position.Or, thewin with strange stocks overseas they may not be credited with as much stock might be pulling back temporarily, then move higher.ability as those who do well in domestic issues.Conversely, traders who At the same time, Ric adheres to his vision, one that helped himlose in conventional stocks feel they are likely to incur less group deri- triple his profitability in a single year.He has a strategy for each stock.sion than the ridicule they may get if they lose in unconventional ones."If my stock is down a quarter or three-eighths, I'm out unless I'mThe joy of winning in a special stock is less than the pain of losing in there for two points.I'm not going to lose a half-point when I wassuch stocks.There is less possibility of being faulted for trading blue- only there to make a half at best.But usually I will not add to a losingchip stocks even though die profitability is not as great as with the less position, either.The bottom line is if this stock is down three-quartersliquid and higher-risk tech stocks on NASDAQ.or a dollar, I'm going to take time and revisit my idea.If I believe inObviously, master traders have learned to insulate themselves from it, I may add to it.I'm not just going to sell it out because the marketconcerns about the opinions of others.They have the emotional flexi- is down.I'm not going to get out of it simply because it goes down."bility to trade what they want to trade without concern for the crowd's He also is always on the lookout for more information that can but-opinion.While the crowd's opinion is a limiting factor for many traders, tress a choice.For example, Ric bought some thin secondary and ter-consciousness of it can help free them from such constraints and there- tiary retailing stocks over a period of months, retailers that were notfore increase the flexibility of their trading.followed much."If I get a chance to buy them cheaper, I'm going tobuy them even cheaper because I like them.I think they're going to getrecognized over the near term, over the next month or so," he says.What to Do about Losses Ric realizes he could be wrong.If one of these retailing stocks dropstoo much, "I'll probably liquidate it at a larger loss than what I mightWithout conscious attention to the process, it is easy for traders to get have had." However, "if I made the selection right, I don't get to buycaught up in losing trades.They may even report that they know what what I want at the cheaper price."they are doing, but cannot move effectively because of their emotional As a super-trader, Ric confronts his losses, recognizing that losing isresponse.Under stress, they may bypass their discipline and go for the part of the game.He does not get explosive when he loses.He knowssucker pitch or take the path of least resistance.Others typically get into that a shift in his perception is critical to tolerating losing maneuvers132 TRADI NG TO WI N Basic Principles 133and turning around his trading.When he sees any of his stocks tanking, Here's one of Ric's mistakes: "I'm losing twenty-five grand on ahe gets rid of them.trade, but I've got three other trades that are making me five or sixIf you're moaning, how much is that emotion influencing the rest grand each," he says."So on the day I'm down an odd lot, down five orof your trading? What trades do you make when you're experiencing six grand, but I can live with that.I'm going to wait for the turn topain? Do you try to get your profit from other trades to make up for it? come so my loss comes back, and I'm going to lock up the profit onDo you end up buying faster to balance out your loss? two or three of my other ones because I know they would eventuallyThe critical question is: Does holding on to losses contribute posi- give up that profit, and I don't want that to happen [ Pobierz całość w formacie PDF ]