Tuesday, January 26, 2010

The Daily Note - Rewards of Sticking with Targets

Targets are an integral part of trading. It is with targets that a trader knows when to start, and stop. Targets are set for entry, exit and bail. It is the only way to protect cash, it's the only way to keep going and it's the only chance for success.

Emotion grips a person during a trade, it's best to be compared to being in the middle of a storm. No matter how we plan for life, it's when the storms occur that we need to implement the hard fast rules for best survival. Without sticking to the rules, we could jeopardise lives because emotions tend to surface during an emergency. Emotions including and especially fear, can paralyze and make one forget what was initially the perfect plan.

If we learn with practice to adhere to the plan, then the action to carry out the plan will become automatic and less likely be battered by emotion. It is why and how survivors survive, putting aside the emotion enables right action and enables success.

It is why I give targets with my stock picks. We can adjust, as I point out, them while the trade unfolds and when we see the storms direction, but adjustments can be made with a cool head and with targets kept in mind.

Perhaps it's during earnings season that we need to keep especially steadfast to our targets. Yes, we may miss out on a big profit but we can also be saved from a big loss. Remember there is always another rocket on the platform and all rockets need to return to earth.

Happy Trading, Living and Rocketing

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posted 08:00 Eastern