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belongs to the trader and not to the market. There is no such thing in trading as the "market's money". For example, if you bought a stock at $82 per share and the stock has risen to $86 per share, that $4 profit belongs to you, not to the market. |
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Mark your positions to market price all the time and consider your profits to be real money. Do not wind up with paper profits that turn into real losses. Conversely, losses are painful and should normally not be deferred overnight. If you hold a position overnight, you are hoping to become lucky instead of relying upon your trading skills. If you feel lucky, you can always buy the stock on opening in the morning without running an additional risk of overnight price declines. |
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We live in a world awash with uncertainty and molting with change. Everything changes every day, and we adjust to change in every way. Price changes in the Nasdaq stock market are the changes we want to capitalize upon. The twin terrors of uncertainty and change force us to make midcourse corrections to our original flight plan. If you make a trade and the market does not go your way, you must adjust your trading position in order to attenuate the market risk. Always be prepared to reexamine each trading decision immediately after you have made the decision and while you are living with the consequences. Furthermore, always be prepared to change a previous decision when you are confronted with new facts. |
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Rarely Hold Overnight Positions |
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It is my personal belief that Direct Access Electronic Traders should rarely, if ever, take home overnight positions. Some other DAET firms preach a different gospel and encourage traders to take overnights. I recommend that you avoid overnight positions until you have mastered enough trading skills to do the right thing. My many years of DAET have led me to the generalization that you should not allow the market to force you to take an overnight position, but you might consider an overnight if you truly believe that carrying the position home is being done because of a high probability of |
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