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prayer will change the current market price. If a stock you own is down 1 point, it doesn't mean that it is more likely to go back up that point instead of down another. Trading decisions must be made on current market evaluation rather than the strength of your hopes and desires or religious beliefs. |
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Only three things can happen to a stock after you buy (sell) it: |
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| It can go up. | | 2. | It can go down. | | 3. | It can stay the same. |
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Two of the three things that can happen to the stock are favorable or neutral to the trader. If the stock goes your waygreat! If it stays the sameno problema minor inconvenience. If it goes against you, the more you let yourself lose, the worse it is. Simple, isn't it? |
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Recognizing that the market has turned against your position is the right thing to do because you must stop your loss before the loss becomes a costly mistake. You don't buy a position to get lucky. You don't take shots at the market hoping to hit a bull's-eye. Save your prayers for more important events than the short-term movement of the price of a stock. |
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Making miscalls is part of the game. Let's assume that you want to travel to Boston and you mistakenly jump on the wrong train, which is headed to Washington, D.C. How long would you remain on this train? Are you going to stay on Amtrak all the way to Washington or are you going to get off at the first stop. The same philosophy applies to taking your losses. |
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To take no action is in itself an action. This sounds like mystical philosophy, but it is a truism. If you take no action with respect to a losing position, you have chosen to maintain the status quo, which in itself is an action. You will then reap the consequences of this action. To be successful, you must have the gumption to execute an essential loss-control |
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