 |
|||
| |||
 |
 |
 |
 |
|
|
| ||||||||||||
| ||||||||||||
|
Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading?
Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I've noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals. In the USA, where I live, all the traffic lights are red, yellow, green -red for stop, yellow for slow down or caution and green for go.The lights always change in order from red to yellow to greenand back again to red after a time. How drivers relate to the changing lights is NOT always the same.There are three types of drivers and responses to seeing a green light: Type one drivers believe the light will change to red at any moment. Inanticipation of the change, they begin to slow down far in advance.I call them "Red Lighters." Type two drivers know green means it's ok to go. They continue on their present course and speed, making no changes at all as they approachthe light. I call them "Green Lighters." Type three drivers know the light could turn yellow at any moment, so they step on the accelerator to catch up to the light as quickly as possible, not wanting to miss it. I call them the "Yellow Lighters." Many people apply these same approaches to most of life's opportunities,including online trading. Maybe you do the same thing. If you see an opportunity approaching, do you slow down, believing that since it won't last you shouldn't be too hasty or you could be stuck in a bad deal? "Red Lighter." Or, do you see the opportunity coming, and just let it come at its own pace, taking your time and accepting whatever happens when it reaches you? "Green Lighter." Or, do you rush to it, knowing that it could be gone at any moment so best to jump on it immediately so you don't miss out? "Yellow Lighter." Each of these approaches has its risks, and its rewards. Red Lighters take no risks, and therefore never "push their luck" by hurrying into anything. On the other hand, what risks are they actually taking by potentially missing out on opportunity? Green Lighters just want to travel safely and smoothly.They don't mind what happens along the way so they just keep going with the flow of traffic. Sounds smart, doesn't it? Yet, whatreal gain is there in being "just like everyone else"? Yellow Lighters don't want to miss any opportunity so will do whatever is needed to capture the potential reward. But how big is their risk in being first? Each is going the same direction, and could even be in the exact same type of vehicle, but none is actually any more guaranteed to arrive at their destination than the other. The Yellow Lighter will probably get there the fastest, but could also get into an accident along the way from so much speeding. The Green Lighter will arrive safely in a reasonable time, but will likely arrive with the rest of the crowd and never be early. The Red Lighter will probably always be late, and will typically spend so much time on the road that they never get to fully enjoy their destination. Which are you? Which do you want to be? How do you assess risk and reward in your financial decisions, your daily activities, your life? Like it or not, everything we do every day has a risk and an associated reward. Getting in a car each day and driving to work carries with it the very real risk of death from a traffic accident, with the reward on the other side of the commute being a paycheck. Everyone must assess the risks and rewards in their life for themselves on an ongoing basis, something that I myself do constantly every day and that I encourage you to do as well. You just might be surprised at the trades you find yourself making unconsciously. I invite you to notice your trading style and adjust it according to theresults you wish to achieve. Being conscious of our behavior patternsand changing them when appropriate can make all the difference in online trading success. Jonathan van Clute is a full time investor, educator, speaker, and online options and sports arbitrage trader. In addition to his business activities, he is also a musician, video editor/animator, and one of the world's greatest Segway Polo athletes. He can be reached via email at jonathan@PMLinvestments.com and is speaking at an upcoming teleseminar, visit http://snurl.com/vclights for details.
MORE RESOURCES:
Stocks-Mutual-Funds - Google News |
|
|
|
RELATED ARTICLES
Investing in the Stock Market - When To! Is really not as important as to how you invest in the stock market. And how you invest in the stock market should take into consideration what goals you are setting for that stock market investment. Paddle Your Canoe At some time in your life you have been on a river in a canoe and hopefully you had a paddle. You know about being up the creek without one. Dollar Cost Averaging Dollar cost averaging is one of the most popular ideas in the investment community. Everyone seems to like it and it has become a watchword among stock and mutual fund brokers. Time Out Are you paying any attention to your retirement savings? Do you have it in cash or an account with a broker? Maybe you have a professional manager who is investing your money as you add to it every month.Is your account increasing in value every year? If it isn't why are you letting anyone else invest for you? There is no point having a loser in charge of your money. Bargain Basement - Finding Stocks That Go Up Have you been listening to the talking heads on CNBC-TV? Or those talk radio stock experts? Getting all those good recommendations on what to buy now. Now?Those guys keep telling me the market is oversold. Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading? Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I've noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals. The Right Mutual Funds For Baby Boomers If you are a baby boomer, time is not on your side. Many baby boomers see retirement age fast approaching with little to nothing in the way of retirement assets that will allow them to actually retire and live a comfortable lifestyle. Downdraft For the year 2000 we have seen hundreds of mutual funds lose 40%, 50% and more of their value. This does not seem right since the fund is supposed to be managed by a professional. The Top 10 Reasons to Invest in Mutual Funds Everyone who follows the financial news has heard of mutual funds and knows the stock market has generally risen (with various ups-and-downs) for over 200 years. In fact, by most measures, the stock market has made more money for more people, and done it more reliably, than any other investment over the past 100 years! If you want to accumulate substantial wealth, you must include stocks in your investments!But, most people who "invest" don't study the market. Mutual Fund Expense Lies When purchasing mutual funds we are cautionedto read the prospectus, look at pastperformance, check out the fund manager's recordand see what their expense ratios have been.We are also told that we should not buy fundswith expenses exceeding 1% to 1. Trade Stocks for Real I read a comment by a forum member on another site earlier today that suggested that every investor should back test their system for at least twenty years. I disagree and will now tell you why. Successful Trading - Establish Your Risk Level Before you embark upon a journey of trading stocks or futures, and before you make any trades, you MUST determine and establish your risk level. Traders that fail to do this are usually doomed from the start. The Skinny on Mutual Fund Investing Mutual fund investing is a lot like Thai cooking. Everyone has heard of it, most know a little something about it, but very few actually know how to do it and do it well. My Stock - Right or Wrong We all know the expression, "My country, right or wrong", but have you ever thought about the stocks or mutual fund you own and said to yourself, "My stock - right or wrong" and held on to your position even as you saw your hard-earned money disappearing?This is the Buy N Hold strategy and, in case you haven't noticed, lost from 40% to 60% and more of investors' money from 2000 to 2003. Fortunately, for the past year stock markets around the world have gone up and folks have recovered about 25% to 30% from those low numbers. Forecasting the Stock Market Every day I see in the financialsection of newspapers how to forecast what themarket will do in 6 months, 12 months, severalyears. "Ten stocks that will double in the next 6months. War Market There is no question that the stock market is being affected by war jitters. When it looks like peace we have a strong rally. Online Trading Strategy: Collecting Cash when Stocks Go UP - It PAYS to Know More than Others When it comes to stock market trading it PAYS to have more knowledge than the rest of the pack. Pure gold can be harvested in each profitable trade that you accomplish. Invest, Be Wrong, and Make Money in the Stock Market I have been trading for several decadesand was an exchange member and floor trader for 17years. You learn fast there or you go broke in ahurry. One Way Street Ever turn down a street, get half way and suddenly realize it is one way and you are going the wrong way? Is that the way you feel when you look at your stock brokerage statement?In either case don't panic. You can get out of that one way street by carefully backing out. Swing Trading Strategies Using Swing Trading Strategies and Technical Analysis when Trading Stocks to Make Consistent Trading Profits.This article is one small part of a series of lessons using Swing Trading Strategies and Technical Analysis developed by WD Gann which are designed to show how anyone can build a profitable Stock or Commodity trading business from scratch.
|
| home | site map |
| © 2006 |