re: not nice ... course of trades sb2000
It is a mental thing SB2000.
I laugh when people take a small profit and come up with the line "can't go broke taking a profit" - that is exactly how we can go broke - few small profits and larger loses - even if we break even eventually brokerage, slippage, internet time, data feeds and software costs etc... make it tough.
The next best line is after selling out - "I can always get back in". Again - this is where most lose - they don't get back in!! It is hard to buy something, make 10% and then buy back in later when it has gone up another 50%. Some people can do it - but most can't - they run off and buy something 'new' as it is less mental pain.
How do I know - experience!
If a person bought Cochlear say for $7 a few years ago and then sells out for $10.50 - do they buy back in at say $15 when the next earnings report and forecast comes out saying it will likely go to $25 ? - NOP - instead they buy something else that appreciates far less - even though they know deep down that Cochlear has much more in it.
It pays not to be shaken out of trends too early - but always exit as per a trading plan - then you CAN get back in if things reverse again.
Why is it that we can get back in more easily under this circumstance? The reason is because we 'traded well' as per a plan - therefore we can feel good about re-entry because we are 'trading well' to a plan.
The idea is to trade/invest well to a plan and not knee jerk reactions. How do I know? Because I have been around long enough to have made every mistake at least once.
We need a trading plan and discipline to follow it to manage risk and stay the course for the big gains.
What has this got to do with PRE - stuffed if I know! Seriously - it has plenty to do with it - and ANY stock - regardless of blue chip or dog.
PRE Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
