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-----Original Message-----
From: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Tuesday, November 24, 1998 12:52 AM
Subject: Gen: Wrong Lessons for trading.
>RT's,
>
>I had an idea I hope a few of you might get involved in. We have all heard
>(or should have) that we must un-learn many wrong lessons that we have
>learned in life in order to be successful at trading. I'm hoping that we
can
>come up with a list of those lessons for our mutual benefit.
>
>I will start out with what I call the "Hogging it lesson". Occasionally I
>hear my father say "it's just an old fashioned idea to get the very most
>that you can." There are times in our experience when this is true.
However,
>I'm sure that many have had this experience. You set a profit target for a
>position after making a trade, the security goes within a few ticks of your
>target and pulls back so that you don't get filled. You may then compound
>the mistake by holding on until the trade actually becomes a loser.
Hi Brent,
My favorite lesson to unlearn is "I'm always right", which is
sometimes extended to "my indicators or system tells me I'm right". The
truth is THE MARKET IS ALWAYS RIGHT, which means I am often wrong. Trading
is the most effective ego deflator ever invented.
A friend of mine recently told me that he had to meet $50,000 in
margin calls this year going long oil service company stocks. Now there's a
man who can't admit he's wrong. To be successful traders we have to decide
which is more important; being right or making money.
Once we internalize this, we stop fighting the market. We start
using stops and good money management, pass up marginal trades, and take
profits when they present themselves. If most traders loose money, I
suspect that most of them lost it because they could not admit that they
where wrong.
Good luck and good
trading,
Ray Raffurty
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