Saturday, December 4, 2010

If you missed out on profits last week....

I don't need to tell you readers that last week was a great time to be long equities. Unfortunately, I was unable to trade the last two trading days as I didn't have time to follow the markets. As someone who likes to trade momentum stocks, I can't help but feel I missed out on quite a decent bit of profits as  breakouts were all very common, and a lot of those breakout stocks were on my watchlist. I am not saying that I would have made a whole lot of money for certain, but lets just say that I would have fancied my odds of doing well the last two days.

I am sure there are many of you out there, who also missed out on last week's emphatic rally for some reason or the other or did not do as well as you might have expected to. Well, here is a word of caution for all you such traders out there. The overwhelming emotion in such a scenario could be to try and get back at the markets and get the profits the markets owe you. After all everybody else made lots of money and its time you get yours, right? Wrong! This is a very wrong trading emotion that can lead to serious drawdowns in your trading account. Please remember, the market owes you nothing. Absolutely nothing! I understand its not nice to miss out on easy potential profits, but it is very important to not let feelings of frustration creep into your trading plans. This can very easily lead to trying too hard and taking unnecessary risks you normally would not take. In my experience, the best trades are those which just come to you without even trying at all.

The market offers us new opportunities everyday and it is entirely up to us what we make out of these opportunities. So, let go of the last week and make a brand new start in the week ahead.

Take care and good luck.

1 comment:

ppmoore said...

Excellent post, PT.
As usual, trading what you see and controlling emotions is the key.