Commentary

If you are new to the stock market and just starting out then I encourage you to read this article which I wrote earlier this year. It emphasizes how important it is to remain in control of your emotions in the market and to not let them get ahead of your thinking. Winners in the stock market are those with a plan.. " Have a plan, trade the plan"

The stock market is alluring with its vast amounts of money being exchanged
every second. The sights and sounds of the floor of the stock exchanges
inspire in us the images of a fast paced nose to nose horse race, the fever
pitch of a baseball game, the feeling of rolling the dice in Vegas. It is
sexy, it is powerful, and it is addictive.. It conjures up within us all
the dreams of being instantly rich with the roll of the dice or the well placed
bet on which horse will win..

For stock traders and investors the dreams
of fortune come from "winning the game" of stocks. The problem is that there is
no one throw of the dice or one pull of the slot machine handle.. In Vegas
you can lose everything on one roll of the dice.. In the stock market you
can not approach your plans of being wealthy the same way you would roll your
dice on the tables in Vegas.. You have to control yourself, plan your next
move, and strike like a tiger when the time is right. And more importantly
you have to sit on your chips and only gamble with a percentage of your chips at
any one time. That is how we manage our portfolio and protect our
capital. Because in Vegas if you bet the farm and the dice don't stop
spinning in your favor.. you've lost the farm and your out of the game with
nothing.

In the game we call the stock market.. there is no "blowing on the
dice"... there is no "come on baby...daddy needs a new pair of
shoes"... For if that is your approach to the stock market then you have
already lost the game.. for you are relying on hope... not a strategy.
Walking up to play the stock market game requires a whole different
mentally. Sure the attraction of fame and fortune is what brings many
traders.. But the ones who win are the ones who come into the game with the
plan of not winning. Yes.. I said that correctly.. Let me say that
again.. the winners in the stock markets are those that plan every move,
every step, every trade with the intention of not losing any money.. Accept
little looses and let the winners add up.

If you run into the stock market
expecting to win big in the first few weeks... you will be out of the game
in no time.. Your approach to the stock market game must be to take bits and
pieces at a time.. Don't go for the gusto in one shot... that is the
wrong attitude and will drive you to make bad trading decisions. Winning in
the long run requires careful and precise moves... such as a chess game.
Don't let the lure of the 'big money' drive your trading decisions. That
will lead you to the soup lines. Instead make it your plan to NOT lose any
money, then the money you gain will add up slowly. This will also allow you
to remain focused on your trading style and remain disciplined to that trading
style. Once the heat of the race takes over your emotions then mistakes will be
made.. And the ones who remain cool, calm, and in control of their strategy
will be the ones taking your money when you get wrapped up in the heat of the
money.

Remember... when we perform our technical analysis of the charts and
apply our understanding of greed & fear then WE will be the ones taking the money away from those being caught up in the heat and excitement of money.. The stock market can be a vicious game.. the money made every day by traders is
not mysteriously printed somewhere... For every dollar someone
makes... someone has lost.. And in order to be on the winning
side.. remain in control.. don't let the excitement and lure of big
money take over your emotions.. For if you do then those that sit on the
side lines; disciplined and waiting to strike; will be there to take the money
from you.