Thursday, January 19, 2012

Ever hear the phrase "Take out all the Stops?"

"...My formative years taught me a couple of very important rules for life in general and they have always served me well, but it took me a long time to realize that they all also translate perfectly into trading.

Rule #1: There is no amount of good work that can’t be undone by one bad decision.
You’ve had a good day trading?  A good week?  A good quarter?  Maybe even a good year trading….doesn’t matter, one bad decision and you can give it all back.
Rule #2: There is an inverse relationship between the amount of time and work needed in order to create and the amount needed to destroy.
Do you spend hours and hours each day looking at charts, talking with traders, running scans, reading all the SEC documents you can get your hands on just to get an edge in your trading? One split second “gut” trade and it is all for naught.
Rule #3:  Sometimes your worst decision will be your last decision.
If you make a decision that is bad enough in trading such as ignoring your stops, adding to a losing trade, or over-leveraging your account,........... it won’t matter what your real intent is, the outcome will be a “suicide trade.”
This last rule of course is the most critical one.  Over the years (in trading) I have violated Rules #1 and #2 on numerous occasions.  I have experienced seeing my hard work/profits go away in one stupid, almost instantaneous decision, and then swear that I will never do it again, but I have never violated Rule #3.I know it is out there though, waiting for me............." it requires Focus and Determination to kill the beast before it kills me. 
From Brian Lund:   $STUDY

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