These days, with so much angst about, people adore more than ever those little nuggets of wisdom for comfort and guidance. There are a handful of trading sayings that I like, but a few of them really get my panties in a bunch. Here are a few:
"Bulls make money. Bears make money. Pigs get slaughtered." – In addition to disliking the violent imagery of this saying, I think it's useless. I guess what's trying to be expressed here is simply "don't be greedy." But the fact is that bulls and bears don't, as a whole, make money. Most traders lose money. Especially these days. The notion that everyone takes cash out of the market except those so selfish that they overstay their welcome is patently absurd.
"Never let a winner turn into a loser." -Again, not true. This black-and-white thinking is deadly. Let's say I short a stock, and it goes to a $500 profit. Then it is heading back to breakeven. I should cover the position at once, right? Of course not! This position could go to a $10,000 profit for all I know. I should cover if the initial basis for my decision is violated. Period.
"You can't go broke taking profits." – I guess if a person takes only profits and never losses this is true. But this is just a perversion – – – similar to saying "cut your winners short and let your losers run." The eagerness to take profits is the main reason that 99.9% of those who trade never make really big money. Because profits feel good. But hedonism and trading are a bad combination.
As for the /ES, I only derived modest profits from the big rise today (I just can't get excited about going long at these stages, but congratulations to those that did). I had some SSO good for a few thousand bucks, and some /ES too. I am short the /ES now at 774 with a stop at 776, and I think I'll take profits anywhere around 756 or so.
G'nite.
