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very well interfere with the fluid nature that the momentum trader must maintain in order to be effective. For example, if a trader believes that the fundamentals of Intel are excellent, selling it short may be a more difficult event even though this is what the market is telling the trader to do. Momentum traders should very rarely have opinions (fundamental) concerning the stocks they trade. |
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The Acid Test Of Any Trade |
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Direct Electronic Access Traders buy and sell all day. Even though they don't normally have to read any books on economics or annual reports, they are thinking and playing mental chess all day long. Intense concentration, total focus, and interrelationship of numbers occupy their work time. Traders do not need the mental ability to play 64 simultaneous games of chess blindfolded, but many of them, if challenged, could remember many prices in a supermarket in one pass. An orchestra conductor I know can remember 75 percent of an opera score in one reading, 95 percent in the second pass, and 100 percent forever on the third reading. |
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A trader need not possess such feats of memory. Many traders, however, can remember the support, resistance, and historical prices of 30 to 300 stocks with relative ease. I train neophyte traders to start with two stocks, feel how the stocks breathe, and then increase the traders' understanding to six stocks. New traders should trade slowly and deliberately. Adopt the motto of Augustus Caesar and "make haste slowly." Augustus was the last person to conquer the entire known occidental world (except Scotland). Trade slowly and learn, because your inventory of trades translates into profit and loss. |
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DAET involves being true to yourself. There is no percentage in cheating by not counting or deferring unrealized losses. Lying to yourself is like cheating on a diet. Any security in your inventory is worth what it is currently trading at, not what you bought it for or wish it were. Neither hope nor |
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