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In a bull market, are you really willing to significantly damage your portfolio just so that you can come off as the biggest, badass bear out there (and vice versa in a bear market)? Having clear goals as a trader is very important, as Joey Fundora pointed out with a great post tonight. Instead of painting yourself in a corner by getting married to a given thesis, being flexible and adapting is the key to success. How many times have you seen a football game where a talented team came out and dominated the first half, only to lose the game in the second half to a well-coached opponent? The other team won, even with less pure talent, because they made the necessary adjustments and had a clear goal of winning the game, which is far more important than showboating your size, strength, speed, etc.
Think about it.
Great post as always Chess!
exactly. one of the big reasons traders lose money is their unwillingness to admit they were wrong. thanks for the post.
This is a great post and I whole heartedly agree. Still, I find it psychologically impossible to play on the tracks when they are start shaking and hear the whistle blowing.