“History doesn’t repeat itself, but it does rhyme.”
- Mark Twain
Every day I use support and resistance lines to read trader sentiment. Recognizing these is an essential trader skill. It works in the short-term and the long-term and so is a necessary skill for investors as well. This same skill is also applied when reviewing my trades. There is no replacement. It’s in my trading plan.
Constant and Persistent Review
When a trader reviews his trades he learns to remove the emotions that are flowing, and assuredly they are flowing, while he is trading. This allows him to zero in on what he did right or wrong before, during, and after a trade has been made. The review process allows the trader time to objectively incorporate the good things into his tool box and to discard the bad. It allows for fine-tuning future trades for profit.
Without this process of review a stock trader might as well be gambling. Consider the roulette wheel. It is the one game in a casino that gives the gambler the best odds and yet the odds still favor the house. There are many systems of playing “the wheel” that would help the gambler win more frequently but for all the effort that a gambler puts in, he will eventually still lose. This is akin to learning to trade effectively and then never reviewing your trades. Reviewing is a necessary skill if you want to put the odds into your favor.
Learning Times Two
Remember the last time you had to learn something new? How did you do it? Did you just naturally absorb everything that was thrown at you and never have to look at it again? Some people are like that. Computers are like that. They are your competition. Is this a problem? Does this mean that we shouldn’t be trading or that we can’t win? Well, it does if you don’t review.
If you are like me it takes constant and consistent review to be able to utilize this new-found knowledge. Most of the time I don’t do it right the first time. Most of the time I don’t ever do it right all the time. Why? Those things I do do right don’t stay right when the situation changes, which it always does eventually. This my friends, is a truism that includes any chosen career.
I have a perfect example of this. I’ve always been a science buff. I was in advanced science classes from a very early age. I remember when there wasn’t even talk of black holes and now they are everywhere. An example that is even closer to today is Pluto. Remember when Pluto was a planet? What is it now, a planetoid or a plutoid?
Pennies From Heaven
That fact is that we retail traders and investors are putting ourselves out on the front line every day and risking our own money just as a small business owner does every day their business is operational. And just as a business can’t be continuously profitable without planning and projections, neither can we. It is important to count the pennies as well as the dollars. One can not amass a fortune without knowing what a fortune is. Reviewing gives us time to do that.
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Quote Stuffing, Sub-penny Pricing, Flash Crash, and Secret #2
by Patrick on September 2, 2010
in Commentary,Education,Politics,Stock Market,Trading
I hope you read Secrets the Stock Market Doesn’t Want You To Know. This is about secret #2.
Click to continue reading “Quote Stuffing, Sub-penny Pricing, Flash Crash, and Secret #2″
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