I fully agree with you Chuck. Consistency is key. Sticking to your rules.
With my style, I set in and out numbers for stocks. Once it hits a certain
percentage I am out. The only time this has hurt me this year was Apple. Once
it got to the $220s I got out as I got in around $170. I had hit my number
range of $220 so I was happy with my ROI. Once I saw it going up from there, I
did jump back in with a very small position around $240. Will add to it when it
falls back down. Since putting on the position, I have reevaluated my in/out
number. I did get back in on a slightly higher in number but I am at ease with
it as I loose no sleep having the position.
Thanks,
Bobby
From: Chuck Kremer
Sent: Saturday, January 4, 2020 10:01 PM
To: cincysmi@xxxxxxxxxxxxx
Cc: Lane Feldman
Subject: [cincysmi] Re: Article: "Trading Too Much Hurts Returns"
I’ll start by saying one thing… Trading is VERY VERY difficult to do
consistently. If one does not treat it like a business that is in an intensely
competitive environment then there is basically no chance for success. That is
not a criticism or reflection on any person. It is just a fact.
Having said that, if one can control emotions and have a real, solid, and
achievable plan in place that is actually used then results can be great. But,
it can’t be done casually.
The thing I’ve seen most is that people have recency bias. They remember the
win or wins and think they are invincible. This seems to result in overtrading
(with lots of losing trades where the trading plan is abandoned and gambling
takes over) or under trading (unable to pull the trigger again). Both of these
cases are a recipe for disaster.
Personally, I’m a day trader and investor. I do only two types of trading: day
trading or long term holding. I long term hold mutual funds in my 401k
accounts. And, I day trade in my cash and IRA accounts.
For the long term accounts I don’t really have a target. I just get in and stay
in.
For the day trading accounts, I have a daily target which translates into a
weekly and yearly target. I have very specific setups that I take. And, I do
not vary. If it doesn’t meet the criteria, I do not take the trade. Actually,
even if it does meet the criteria I may apply some subjectivity and skip that
trade and wait for the next one.
I’ve found that this works for me. I understand that I cannot do anything in
between. I’ve tried day trading and swing trading together. I simply can’t hold
those two types of trades at the same time. So, I don’t try. And, I really like
being flat at night and over the weekend as it lets me sleep.
Apologies for the rambling. Just my .02.
Cheers,
-Chuck
On Jan 4, 2020, at 7:41 AM, Bob T <bobtsgt@xxxxxxxxx> wrote:
I agree since most investors are use way to much emotion when it comes to
trading. Mainly based out of fear of loosing money or the fear of missing the
next big spike in price. Things like Dollar Cost Averaging usually allow an
auto investor to outperform those who have daily checks over their account and
can hit that buy/sell button when the fear strikes. I know I use to be a victim
of this in my earlier years.
Bobby
Sent from Mail for Windows 10
From: L. Feldman
Sent: Friday, January 3, 2020 10:35 PM
To: cincysmi@xxxxxxxxxxxxx; Lane Feldman
Subject: [cincysmi] Article: "Trading Too Much Hurts Returns"
Dear Friends,
Here's an interesting article. Do you agree with the author that "Trading Too
Much Hurts Returns"?
earlyinvesting.com/trading-too-much-hurts-returns/
<F1A8EAFAF2DF4B35B67A7A9B338E0659.png>
<386EB055F67B423FB60BFC8A512E6871.png>
Why Buy-and-Hold Investors Outperform More Active Traders
Data shows investors who trade too much underperform their “buy-and-hold” peers.
Happy New Year!
Regards,
Lance
