Higher highs scare me, especially on stocks that are too high relative to valuation. Yet, I wonder if that fear is something from my past, a time when I knew less and lost more. I wonder if I need to up my confidence a notch to take advantage of a market that is refusing to give me openings on the downside.
- If we stopped buying tops in this market, there would have been plenty of missed opportunities. Onward and upward!
The above quote, (Larry Levin, TraderPlanet Today), sparked my thinking about my trading confidence. It is worth thinking about because without confidence, traders either fail or, barring failure, they don’t work. They don’t work because they don’t ever pull the trigger unless the trade is a sure thing, and any trader who has been playing the game for a while understands that sure plays only exist when a trader has confidence in the play. Confidence in the play comes about only when the trader has done the work necessary to believe.
So, back to my musing … Do I need to up my confidence a notch, take a chance on plays I would not normally take a chance on?
For example, I have traded PLUG all the while it was rising some 320%. One time in that span, it jumped really high, but it could not sustain the higher level. I bought in at a level decently below the high, but the next day it rolled way back, past the recent low and way past me.
I waited some three weeks for it to come back. It did, and I profitably traded the stock again, (I bought more on the downside) right up until its recent meteoric jump. This time, however, it is not rolling back to a level I am comfortable buying, so I am watching a highly tradable stock leave me behind. There is a certain sense of loss, a feeling that I should run after the fast moving train. I am watching profit slip away.
You know, writing about this has helped me understand something critical to successful trading. Let me rephrase that. Writing about chasing a fast moving train has helped me re-understand an important part of trading, a piece so critical that it often makes or breaks traders – stick to the strategy, unless the strategy needs to change because it is not working. In the case of PLUG, all totaled, I made more money buying and selling it in the same time frame it rose that 320%.
My strategy is working, and it is working well. PLUG might be running away from me now, but it will come back. The stock cannot hold its current levels and when those who currently love it decide enough is enough, I will be waiting with open arms. I will welcome her, uh … uh … I mean it back and be happy again.
In the meantime, I have other plays I am making, and they are working out fine. In fact, it appears today is a good day to buy (not die). The overall market is retreating from its initial liking of the jobs report number and some of my other plays are nearing their buy points. Ding, ding, ding, there goes a buy right now as I write.
The Bitcoin story is still alive and well. Intrigue is now the aspect most interesting to me. The latest today is that Newsweek claims to have identified the mysterious creator and that gentleman is offering denials up and down, right and left. To misquote a famous writer, “Me thinks he doth protest too much.”
- Newsweek yesterday “outed” 64-year-old Japanese-American physicist Dorian S. Nakamoto as the creator of Bitcoin. However, Nakamoto denied involvement in the digital “currency.”
Okay, so discovering who the man is behind the mask is fascinating, but, in actuality, I am finding it more interesting that Japan is freaking out about the Bitcoin rage.
- Japan has decreed that Bitcoin is not a currency and that there are no laws to define it, although the government said in a statement it can tax transactions. The country’s banks can’t broker Bitcoin deals or create customer accounts to hold digital assets.
Frankly, I am not surprised to see the collapse of the Bitcoin currency. Just like my beloved PLUG, that train was leaving the station to find other lovers, but it was traveling just a bit too fast. Unlike my PLUG, the train carrying Bitcoins has crashed, making a passionate return unlikely.
Trade in the day; Invest in your life …
