As promised, here is the comment for today. Within the comment is a question that points to an issue that most traders would happily have to face …   

As you know, I’ve been a long time reader of this column and have benefited from your knowledge and the experience of many traders who contribute. I just finished up my 1st green month in years! I used options to ride the trend until Wednesday before expiration. My problem is I closed my Bank of America calls too early and missed out on an additional 60% of profit.

I want to feel good about my profitable month but I can’t get this trade out of my mind. Can you share similar experiences and offer some advice? Thanks for everything. Hopefully I can write a comment in the future when I discuss earning my first million dollars!

In late 2004, the dark clouds looming over the real estate market promised more than rain. It looked to me as if the clouds were bringing force enough to collapse the whole market. I called my agent and told her it was time to end my almost 25-years in real-estate investment. She asked me why, and I told her the “house of cards” was coming down. She disagreed, but she did her job. She sold all of my properties, and I was out.

I watched the market continue to rise for another year or so, and I have to tell you, more than once I thought selling at the end of 2004 was a mistake. More than once, I thought I should have just waited. More than once, I thought ….

The point is that lamenting “not enough” profit is as mentally unhealthy as lamenting too much loss. In some ways, and for some folks, it might actually be more unhealthy. Simply, when we lose, we can often find a reason and lay some blame elsewhere, but when we “miss” big profits, we tend to blame ourselves. I have learned this lesson well in my years of trading, but the fact is that now I am perfectly happy taking profit and not looking back with regret. Why? Because the whole point of the game is to make a profit, period. You win when you make money.

There will always be trades that continue making profit after you exit. You have to let them go, emotionally. If you don’t, you will find yourself becoming insecure when in a trade. “Should I stay in just a bit longer?”  No, doubt is the killer, and it will eventually take you down. As I have said over and over again, confidence is everything in this game.

When I look back at my decision in 2004 to sell my properties, I understand now that the reason I did not listen to my agent is that I had confidence in my ability to understand the market I was trading. I could see the big picture, and it did not look pretty. I did not know exactly when the collapse would happen, but I knew it was coming, and sure as %#&, it did arrive.

So to you my friend and supporter, take your win and rejoice. Analyze what you did to achieve success, Sure, you might tweak the strategy for future trades, but don’t see the result as negative. Carry your confidence forward with care. Embrace it and see it for what it is – your trading ability is making you money.      

Trade in the day; invest in your life …                                                                            

Trader Ed