FIXING A PRICE OR POINT TO BUY OR SELL The majority of people have a habit when they buy or sell a stock, of fixing in their minds a certain figure at which they expect to take profits. There is no reason or cause for this. It is simply a bad habit based on hope. When you make a trade, your object should be to make profits and there is no way that you can determine in advance how much profits you can expect on any one particular trade. The market itself determines the amount of your profit, and the thing that you must do is to be ready to get out and accept a profit whenever the trend changes and not before. Remember the market is not going to act to please you or go to certain figures just because you want to buy or sell at those figures. Many traders lose big profits by fixing the price at which they intend to sell. Stocks sometimes go within 2, 3 or 4 points of their selling price and start to decline. They hold on and hope. Just because it does not reach the point that they have fixed in their minds, they often hold on and hope until they lose all the profits and take a loss, refusing to see that the trend has changed. Hope will ruin any man who follows it in the stock market. To succeed you must face facts, and facts are often cold and stubborn and do not agree with your hope, but you must accept them for your own good. In nearly every bull or bear campaign in the market the general public gets certain fixed points in their heads where stocks are going to make tops or bottoms. The newspapers talk about certain favorite stocks going to 100,125,150 or 175. Everybody gets the idea that these prices are going to be made and they become "hope" prices, but are never realized. To illustrate this: During the fall of 1909, when the bull campaign in stocks was at its height and Steel common had advanced to around 90, the newspapers began to talk of 100 for "little Steel." The public all got the idea in their heads that Steel was sure to make 100 and that was the place they were going to sell and take profits. The writer predicted that Steel would advance to 94 7/8 and no higher, which it did, and he sold out, while the "hope" crowd held on and eventually took losses, for U. S. Steel declined eventually to 38. Several years later when it did reach 100, it was the place to buy and not to sell, for it immediately advanced to 129 3/4. The man who tries to get the last point or the top or bottom eighth generally loses all his profits. You do not have to get in at the bottom and out at the top to make big money. All you have to do is to look over the list of the active leading stocks and you will find that they make moves of from 50 to 150 points between bottom and top every few years. Then, if you can get in after the stock has advanced 10 points from the bottom, and sell out within 10 points of the top, you certainly will be able to accumulate plenty of profits. Never get the idea in your head that you can or will hold a stock until it goes your way. This is nothing but pure stubbornness and is not based on any sound logic or reasoning. In case of doubt, get out. Do not hesitate. Delays are always dangerous. Do as the insiders do: If they can not get what they want, they take what they can get; if the market will not take what they have to offer, they offer what it will take; if the market will not go their way, they go its way. A wise man changes his mind, a fool never. make money online ~ forex trading training |