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Tip!
A stop-loss order should never be lowered and should always be
raised to follow a stock price up as it increases. It is not too
late to do it.
Ultimately, a well-defined trading
goal should specify the desired average annual return and the
corresponding equity drawdown that a trader is comfortable with,
financially and emotionally.
Following a methodology that meets your goal is also of prime
importance. This is the key is picking the right stock market price
that fits your trading plan. What if you follow a methodology that has
the potential to average 30%/year return with limited drawdowns, and
that performance level easily meets your goal? Would you continue to
follow that methodology? Logic dictates a resounding yes!
But what if that methodology calls
for you to limit your trading or to stay in cash for a period
of time, say a month or two, due to a lack of high probability
opportunities? Or what if that methodology goes into a drawdown
period?
Then what? Do you have the discipline to stick with your goal and the
methodology that could potentially meet your goal, or will you grow
impatient and abandon your methodology? It is probably not surprising
that the answer to that question is different for professionals (who
stick with it) than for amateurs (who often bail out and try something
new only to repeat the cycle over and over).
Tip!
When glancing at charts the untrained eye may simply see random
movements from one day to the next. Trained analysts, however, see
patterns that are used to predict future movements of stock prices.
The key to potential stock trading
success and finding the stock market price for entry that is best
for you is having a well-defined goal, the methodology to potentially
meet that goal, and the discipline to stick with it. |
