Saturday, February 21, 2009

Trade for profits, not for excitement

Trade for profits, not for excitement

It is not about what you trade but rather how you trade. By just
selecting the appropriate strategies isn’t good enough, what you need
is a system that can produce consistent profit every month. It requires
discipline to follow your trading plan and your trading objectives.

You must be able to differentiate between trading and gambling. Many
will get carried with one strike of chance and take away a big prized
money or being misled by others who post their winnings in some
forum. If you feel excited when you are trading options, you are
gambling.

Many novices don’t even read charts or relay on any technical
indicators at all when buying the options. What they have in mind is
the amount of money they can make if the stock makes a big move
the next day. This is greed; too much is going to kill you. Be very
careful as not to turn your computer screen into an online casino.

“If investing is entertaining, if you’re having fun, you’re
probably not making any money. Good investing is boring”

– George Soros

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