Not every note is played by musicians, but most of us do not notice it; if a singer skips a note it's more noticeable but when a trader skips one it is undeniable. Miss a beat and you may not get the optimal in/out of a trade, or worse miss the last possible exit before the winner turns into a loser.
It is why we have stops and why we all must use them unless our purpose is to be in the trade for a long haul and are willing to be in the red or green several times before our goal is reached. This could take weeks, months or years even and then, the name changes from trader to investor.
So you must ask yourself who you are in this game before committing any funds, realizing of course that you can be both, but then the hats cannot be confused and the notes have to be played either as a song or a symphony.
If you carve a song out of a symphony, the notes have to be skipped so you lose edge as an investor, re-entry is more difficult and timing is lost for the long term range taxation on profit. Turn a song into a symphony and you mix your styles losing notes as you skip possible profitable trades within the long haul. It is why we keep the accounts separate.
Investors must keep away from the daily vigil and take only occasional looks at the score, since the score is known by heart and need only a glance at the conductor for direction. Sure, notes are skipped here and there, but the consequence is not dire because the symphony as a whole is carried by many musicians and the occasional lost note is picked up by others. The short term trade is like a new song played solo, so we have to be careful to learn all the notes and keep repeating them until we know the right time to execute it to perfection.
Happy Trading, Living and Investing
Today's BlogPick - LULU
©DayTrading with Anni 2010
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