Tuesday, March 9, 2010

The Daily Note - The Follow Through

"Wipe on", "Wipe off" remember those instructions by Pat Morita in "Karate Kid"? Remember it for trading. The exercise for a good trade is to keep your mind's dexterity alive from one day to the next. What happens one day may be wiped off the next in part or in total. Seldom does it continue to rise or drop without a pullback or an advance. It is a test of strength for the direction.

As in physics, when the direction is weak, the test will fail; when it is strong it will accelerate. It is the recognition of failure or strength that will give you an advantage in trading. Pull trigger to stop or pull trigger to add to position.

Consider the thought as you watch the movements today. Make a note about where you would add or stop based on the stock movements in the previous period, and keep practicing to improve your skill to follow through.

Happy Trading, Living and Dancing

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