Over xmas have had the chance to observe a bit of human nature and also look back on last years trading. One thing I noticed is that most people will readily brag about their wins or what they are good at. Very few will ever admit to their faults or what their weakness's are. In sport and in life you must first identify your weakness and correct them or somehow avoid. I called a relative an acholic on Wednesday and did not go down well. He drinks 3-5 bottles of wine a day every day but cannot see it is destroying him. Back to trading looking at my last years performance. The fault or problem was 2 big losses spoilt a pretty good year. So how did this happen and how to avoid or keep repeating.
Problem one buying and holding a large position into drilling results MEL hit water instead of oil. When they came out of th the sudden drop gapped my stop loss and ended up with a 50% loss.
Solution sell half or more into lead up to results. So what if the results are great you can always buy back in if it rises.
Problem two Hanging on too long as volume drops off and momentum changes. Take the profit and run.
So my strategy this year is focus on not losing.
