Discipline. Without it, you're in a world of hurt, but unfortunately, we double talk ourselves to believe our own bullshit. It will add up and crush you.
Have you ever been in something, saw it fall and then made all kind of excuses for it, now it's every day item lower? Sure you have. Have you ever won a few in a row, and then immediately turn you into some kind of god stock, and buy bigger and heavier the next time, only to see it all go down the drain? Sure you have.
Many times what separates a good investment from a wish, it is discipline. We've all made stupid mistakes in the past, but we have learned enough to change? Our roads In many cases, the answer is no. But therein lies the key people. If you learn to be disciplined, you will be. Much better investor
Let's say you buy 100 shares of XYZ and it's about spending a few hundred dollars. Then the next trade 100 shares of ABC, and it goes on to create a few hundred. That human nature is to get. Braver Out of the box you buy 400 shares of ABC and the "tree" the next time it is acid and erases all your previous winnings. Why do you have to buy as many shares Because your previous two victories strengthened your ego. You have pride. You thought you had it all figured out. That's gunna hurt.
Let's say you had a few days to lose. Do you do it all on red, and turn the wheel? If so, that is gunna leave a mark. No people, the way to win this game is from day to day, and stick to a discipline. You do not double down on a losing trade, you will lose more. You do not wear your desperation on your head like a big silver badge. You stick to your plan.
We have seen too many people get hurt by doing stupid things. Really good traders have packed up and gone home broke by getting too much ego, or getting too much despair. You can not have both. Every day is a new dawn. It does not matter if you've won in a row, this is a new day tomorrow. Tenfold All those victories mean jack when the bell rings.
Do not deviate from a well constructed plan for people. Please losses for what they are losing. A part of the game. Do not blame the loss of yesterday stupid actions today. If you have a stop in place, try it and honor it. Not making excuses for a bad game, but shake your head and move on.
People tell us all the time, "boy you play it close to the vest." Yes, we do, and because of it, we do not get too many "home runs" where we doubles and triples. But again, our average loss is a percent or two, while our profits on average 4 to 6%. We can live with it and so can you. Unless you are one of the truly happy people, and yes we know they exist, it is better to sell your own basic plan. Do not understand, do not reach, let a small loss turn into a big one.
In baseball, the man who occasionally can get at times is the most sought after player. As much as we all like to see a monster home run and we worship the boys a 500 footer can crush, the fact is the home run man strikes out many many times more than he hits a home run. But his only punishment is a few boos and a lonely walk to the dug out. But in our game, go for the fences carries a dear penalty. We're going broke.
Be the consistency guy. Be the man that makes a lot of singles. Along the way you get double and even your home run. But do not focus on them. Focus on the basics, day after day. It works for the major league and it will work for you. Stay disciplined.
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