This Week's Lesson

“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this:  It never was my thinking that made the big money for me.  It always was my sitting.  Got that?  My sitting tight!  It is no trick at all to be right on the market.  You always find lots of early bulls in bull markets and early bears in bear markets.
Men who can both be right and sit tight are uncommon.  I found it one of the hardest things to learn.  But it is only after a stock operator has firmly grasped this that he can make big money.  It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.” 
                                      – Reminiscences of a Stock Operator

My favorite section of Reminiscences rings resoundingly true.  I had a target of ES at 1038.50 made on Tuesday afternoon and it reached there on Wednesday.   Yet I closed out my short trade at higher prices.  I called for a weak close on Friday, was bearish as all get out before the trading day started. I covered too early and didn’t make as much as I should have.  You’ve got to be a pig to make the big bucks.  I still have the problem of not letting my winners run.  If I could only solve this problem, which I’ve battled my entire trading career, trading would be much easier.  Even with this big flaw in my trading, I’ve still done OK.  The saying that you can’t get broke taking a profit is bunk.  If you keep cutting your winners short and ride your losers, you will go broke.