holygrail
72 posts
msg #27212
- Ignore holygrail |
7/5/2003 9:05:49 PM
For the record, this is NOT Holygrail, this is his trading buddy.
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FEAR
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I have been telling people to FORGET EVERYTHING THEY KNOW.
Today, I realized I left out the most important part....
FORGET EVERYTHING YOU DO NOT KNOW!
What you don't know is what is going to happen next... ANYTHING CAN HAPPEN!
When you let what you don't know influence your buying/selling, this causes you to hesitate. FEAR takes over!
FEAR is what is keeping you from SELLING when you need to sell and BUYING when you need to buy...
Fear has been defined as False Expectations Appearing Real.
Have you ever said:
"Everytime I sell it goes up"
"Everytime I buy it goes down"
"I am always on the wrong side of the trade"
I know I have.
It took me almost a year to find out why the above statements appeared to be true. One friend said to "find the pattern".
I looked and looked. It wasn't until I was taught the value of LINEAR REGRESSION by another friend that I found the answer.
One judgement error usually produces another...
1) Enter stock at "wrong time" too close to upper Bollinger band and/or Upper Lin Reg...
2) Fail to place stop loss immediately after entry.
So, first a judgement error (rule breaking) and a trading execution error (another rule break)
And the stock goes down just like the chart says it will.
This reinforces what you think you know (everytime I buy....)
You refuse to sell the stock because EVERY TIME I SELL IT GOES UP. FEAR has you by the you know what!!
So you wait... and it continues to go down.... days go by.
FINALLY YOU CAN'T TAKE IT ANYMORE SO YOU SELL.
3) Fail to do what the chart tells you to do.
Of course the stock goes up because... EVERYTIME I SELL IT GOES UP.
Wrong, the stock went up because it was probably near the lower Bollinger band and/or lower Lin Reg and you should have been buying!
YOU HAVE TO TRUST YOUR TRADING TOOLS AND TACTICS
For the record, this is NOT Holygrail, this is his trading buddy.
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