ETF Range Projections

Faith in a holy cause is to a considerable extent a substitute for lost faith in ourselves.

- Eric Hoffer

For more detailed economic data click “Today’s Calendar” in the navigation bar to the left.

Overseas markets, after yesterday’s swoon are a little better: Nikkei 225 +0.47%, Hang Seng +1.25%, Shanghai +0.53%, DAX +0.12% and the FTSE +0.08%.

At about 7:30 AM ET,ahead of a fairly heavy calendar the futures are a bit better: DOW +29, S&P+3, NAZ +4, Oil +$0.53 and Gold -$0.70

trade safe and

have a great day!

Your Money / Your Objectivity

I will be having outpatient surgery today,  Here is a reprint of a newsletter from 2007. Member area will probably be updated at the normal time but there will be no trading notes tonight,

 Your Money / Your Objectivity

Has anyone ever confided in you about a losing trade? Maybe they risked too much capital or failed to execute their exit strategy; perhaps they didn’t employ an exit strategy at all. This is precisely the point at which denial sets in; panicky and dazed your friend is hiding this news to those closest to them such as a spouse. Your money isn’t at risk and on the line and therefore you can not understand why this person does not just accept the mistake and move on. When fear takes hold it’s hard to think straight; you’re not only losing your money but your objectivity as well. At this point it’s important to get out of the emotional hole you’ve created, regain your composure, and take a good, hard look at your options.

There’s a natural human tendency to protect our assets, and an equally natural inclination to deny the trouble we are in when we’ve made a losing trade. If you’re like most people who enter the trading profession, you want to win. You hate being wrong, and you hate losing. The need to be right, however, is a trader’s worst enemy. Traders sabotage themselves when they fail to admit their shortcomings and mistakes. I know it’s easier said than done, but flexibility and open-mindedness are the hallmark of success for a trader. If you can be flexible enough to admit your mistakes, which result from being human and vulnerable, you’ll be able to take losses in stride. You’ll be able to stay objective.

It’s extremely important to remember you are not powerless over you emotions. You can restore control. Unlike many professions; perfectionism does not exist in investing and trading. It is very normal, at every setback or loss, to think, “How could I have been so stupid, so incompetent?” You should go into trading expecting more losses than wins. But that’s all right. You can end up profitable in the long run with what you think are a low percentage of winners. Ever hear “Let you profits run, cut your losses short?” Remembering this fact of trading can help you maintain your composure.

Secondly limit your risk to a small percentage of your trading capital, and trade with money that you can afford to lose. Not that you would like to lose it, but you can afford it should it happen. If you know deep down that you can survive a loss, you will stay calm even during the midst of a losing trade. Never underestimate the value of risk management.

Finally, if circumstances are so overwhelming that you cannot think clearly, you might want to think about closing out a trade even when it’s going your way. These days, commissions are low enough that you can easily close out your positions, evaluate them, and contemplate your options. The relatively low commission costs are worth it when you consider the piece of mind it buys. You’ll find that once your money is no longer at risk, you’ll calm down and look at your trades more objectively.

Staying optimistic and managing your risk, you can remain objective, free, and creative. And when you reach this state of being, you’ll increase your chances of mastering the markets.