Yeah I get the pride and denial bit. There have been thousands of stocks I’ve traded long or positions I’ve carried short and I’ve Day dreamed of the potential of each.
One thing I learned very early on was when you’re wrong there is one clue that you can’t ignore: you’re absolutely dead wrong if your position is in the red at any level.
How wrong do you want to be? What’s the risk tolerance of the play? Is the tolerance 1-3% (usually a day trade) or is it larger 3-10% for something with a horizon that’s further out?
No matter the tolerance, if you buy a stock you bought it at a time where you know you can’t see the future but you think you’re right and it’s the bottom. That being said you’re calling a bottom or near bottom so if it goes red on you then your bottom call was wrong.
Another thing I learned very early on was that if you determine that you’re wrong based on the above tolerances being breached THEN YOU HAVE TO ACCEPT YOU’RE NOT PERFECT AND GET OUT OF THE POSITION because tomorrow (we all want to say “maybe tomorrow”) it’ll likely get worse, not better.
When I was a young trader I had a long string of very successful trades. Such a long streak of incredibly successful trades gave me a reputation as some kind of “natural”. People came to rely on me for how right I was.
I vividly remember the first time I got one wrong. I was in denial. I stayed in denial and reassured people of my natural abilities as a technician. It went bad and only got worse til a lot of money was lost. I stayed in denial and even doubled down and advised others to do the same or stay patient.
It only got worse until finally I was forced by my boss to close the position. I got lectured on denial and reality and hubris and ego.
I’ve made some bad trades since then and been wrong a lot. I’ve been right more often than wrong BUT MORE IMPORTANTLY I learned to admit you’re wrong early and you’ll keep losses small.
Anyway...just my two cents on successful trading.
Steve Berman?
He’s a guilty con man. A lot of people say “he must not sleep well at night”. I believe that Steve Berman does sleep well at night because he’s not wrong: As long as he can keep people in his stock and keep writing toxic convertible debt against the common shares, and as long as he can keep getting paid from those notes, he’ll sleep like a baby.
The only time Steve Berman won’t sleep well will be when the well dries up and his paychecks thin. By then he’ll have concocted a new scheme and people will fall for it.
He’s been in trouble with the SEC before. That may make some people believe that he’s afraid of it happening again so he won’t sleep well if it does.
Not true...these Penny Stock CEO frauds get things like $25,000 fines but they’ve made millions and get some type of probation or ban from being a fiduciary at another company for a few years...but we all know there are ways around that.
