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.It was a self-fulfilling prophecy.points but you think they will reverse."These are slow months.I have fewer positions," he said."We're ina tight little range.It is hard to make ten thousand dollars to twenty-five thousand dollars.I am not trading during the day as much.I try toPlateauinffget positions for the day and feel comfortable."Max noted that he usually struggles after the first quarter.Then,Max, whom I introduced earlier, mentioned that he had lost $40,000September through February, he does very well.He rationalized his ho-on the last day of the month for the past two months.His interpreta-hum months by attributing them to the summer doldrums.However,tion? "Half of the loss was due to being lax.Half of it was not listeninghe knew that he had to "get out of the drama, let go of the old pro-to myself.I'm usually up three hundred thousand dollars for the firstgramming."two weeks of every month, but I can't get past that number.I sit there.Then one year he came through July and August with a profit.HisI can't make five hundred thousand dollars.To make the three, I focusexplanation: "I toned down what I was trying to do.I wasn't trying toon a situation and get big enough in it where I feel good about it andturn it into one of my more productive periods.I had to settle down.make a couple of points.And in settling down, I eliminated losses.I didn't add so much on the"When I get bigger, I have fewer positions to concentrate on.But Igain side.So the net result was I personally had a better season." By thesell the good ones because they are not down.I hold the worst stocks,end of August he was up $1.2 million for the year, "and then that gaveand my P&L drops instead of getting rid of those poor stocks at theme a little more comfort to play bigger in September." Septemberoutset.I had eleven stocks.The seven that were good, I got out of.Theturned into a million-dollar month, which he had never had before.four I should have been selling, I couldn't get out of."What changed? "I saw what I had to do, and I saw an opportunity,When Max gets to $300,000, he reverts to old habits.He is gov-and I traded aggressively enough to capture that opportunity.It waserned by his reactions, and not by events or previously plannedgreat.There were one or two very significant large trades where I did astrategies.one-hundred-thousand-dollar P&L in one trade or more.That wasOvercoming Common Mistakes 205TRADI NG TO WI N204Repeating Habitual Errorssomething different." By noticing his pattern of a long summer yawnand then deliberately trading bigger and bolder in September, heSome traders repeatedly make certain trading errors because habit andturned his previous stopping point into a victory.temperament, more than trading strategy, dictate their behavior.If youare aware of your predilections, you can be better prepared for themwhen the same errors rear their ugly heads.What Are Tour Own Points?Like most of us, you have probably been conditioned since an earlyage to avoid mistakes, to minimize them, or to cover them up.TradingAll of the situations just described illustrate different stopping pointsis an occupation that offers its players many ways to hide their mistakes,that point in time where your fears and beliefs keep you from enteringrationalize them, or blame them on others.Even if you make all thesefully into the next moment and instead keep you trading in repetitiveerrors, you can still make a living.However, by recognizing them as po-and possibly destructive patterns.To overcome these stopping points,tential learning experiences, you can use them as tools for growth.you must begin to view market events as neutral and handle them inAs you read the following descriptions, which are based on inter-terms of your conscious objectives, not in terms of old beliefs, such asviews with a group of traders, once again ask yourself if these are amongyour fear of the unknown.the mistakes you are inclined to make.Then ask, "What can I do toRecognizing your own stopping points is a big step en route tochange this habitual response?"managing fear, stress, and trading discipline [ Pobierz całość w formacie PDF ]