2007 New Year’s Resolutions
To be a more disciplined trader (for me, that means tighter stops)
To continue to observe strict money managment.
To achieve consistent profit in the market.
Update trading checklist; add new things I’d like to use and delete those that do not work in this market condition.
Most of us started trading with high hopes of success but we let our emotions and greed take over. Instead of taking the time to develop and test a prudent trading plan that works for us on paper, we just jump in with both feet and start using real dollars well before we’re ready. After all it looks so simple! How quickly the markets will humble us and beat us down if we are trading out of greed instead of a well thought out trading plan. It is at this point that many will give up and quit, but those of us who step back and rethink our trading approach will survive as we go through a rebuilding process. Successful traders aren’t quitters, we don’t give up. We learn from our mistakes, we become better persons and we succeed.
Don’t make the mistake of many who have tried and failed. They failed because they did not keep on keeping on. They did not persist in creating new plans to take the place of those which failed. When your plans fail remember that temporary defeat is not permanent failure unless you give up, unless you quit. You are never whipped until you quit. Even the best trades have bad days, accept temporary defeat as a learning process of how and what you need to improve at and make a new plan and then start all over again.
No one can expect to accumulate a fortune without first experiencing temporary defeat. When defeat comes accept it as your signal to assess what went wrong, and make new plans that put you on your way towards accomplishing your goal. If you give up, if you stop making new plans before your goal has been reached you are a quitter. A quitter never wins and a winner never quits.
The stock was trading around a price of $26.29 on 23 jan 07. The chart above is a daily chart of the Pfizer Inc. [PFE]. The stock is rated as an average stock because it is fairly valued compare to its industry, its sector and the S&P 500. This trade was made mid-day on Tuesday. The trader selected the stock because overall it is in a downtrend, trending lower since its high set back in September. As the trader has mention, the stock does have wild price swings to it but it does have a very strong resistance level above. It just reported unfavorable earnings and so the trader believes that prices will yield to weakness and fall lower towards support near the $23.25. Of course, once this happens the Put option will increase in value.
