Home > Psychology > stock trading: not a collapse

stock trading: not a collapse

As an online stock trader you are always looking for an obvious opportunity. You are hoping to wake up one morning and have the market hand you money on a silver platter because the bias of supply or demand is so tilted to one side it’s juts a matter of how many shares you get and how long you are going to hold on. Yesterday was one of those days. It was a day to clean up and pay your rent.

One of our newer traders who is trading firm capital reached his intra day stop loss 20 minutes into the open. The market basically drifted sideways for the first 45 minutes before starting its decline. He wasn’t patient, there was nothing to do yet. He blew an opportunity to have a big personal day because he wasn’t disciplined. Always remember you are not being paid by the hour as a trader, you are being paid by the month. I will be having a talk with him this morning, I hope he went home mad. It’s the only way to improve.

Getting back to yesterdays collapse. If you were watching CNBC you would have thought they were brodcasting a funeral. You always need to kep the big picture in perspective. The market has not had a significant pullback in almost two years. Yesterdays 300+ point decline was long overdue and we are probably not doen going down. We did the second most volume in NASDAQ history yesterday which suggests a significant distributions day. Housing starts were down and believe me, the sub prime mess has not even begun to be felt, those houses in potential foreclosure will not hit the market until next spring. Yesterday was a blip in the big picture. Keep it in perspective.


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