Thursday, June 29, 2006

Quick Bucks??? THINK AGAIN!


I always get people asking me: “What are you investing in?” “Do you think ethanol will continue to soar?” “How do you do it?”

Sure, it inflates my ego, but I have to tell you the truth: I don’t have a secret when it comes to the stock market.

I am not a stock broker. I don’t have buddies who know the “biz” and tell me their secret information (that is illegal by the way). I don’t have a secret crystal ball that I am hiding in my closet.

I am just like you. I read information that is readily available on the internet. I choose well known stocks, not some new startup that has no information on it.

The secret that I use is this: HAVE A STRATEGY.

It is easy as that.

I may be able to make money on the markets, but that doesn’t mean I have been right all the time. I have made mistakes before, and YOU CAN BET I will make mistakes in the future. But what separates those who win in the markets and those who don’t is that those who win, HAVE A STRATEGY.

They know when they will get into a trade, and also when they will get out (be it if a profit target has been met, or if their trade turns sour).

If you’re wrong, ACCEPT THAT YOU ARE WRONG, and GET OUT. You won’t always be wrong, and I am sure if you got out, and entered a better suited trade, you will not only recover your loss, but tack on profit.

I know this, because I have done it time and time again.

HAVING A STRATEGY eliminates your emotional instinct. Get out of a trade if it reaches a price.

BUT YOU HAVE TO HAVE A STRATEGY BEFORE you enter a trade.

It’s simple as that.

THIS RULE is so simple, and so overstated, but so easily forgotten, because everyone thinks that a losing trade will turn around, and become profitable.

NOT ALWAYS THE CASE!
Have targets, have a strategy, and you will be fine.

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