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My portfolio suffered about a 1% decline today. I had enough cash to place one more buy order – BRKT at $16.80. It can be disconcerting to see all that red ink on ones holdings. However, if psychologically you can’t take some loses, then you shouldn’t be in the market. I remember my earlier days, when I reviewed my trading success. I found that 65% of my trades lost money. However, the 35% that MADE money, more that made up for the losses.
Since that time, I’ve refined my strategy. I always wager a percent of my total equity on each trade. As my equity grows, my wagers get bigger. If I suffer a series of reversals, then my bets get smaller.
I checked my total holdings and found that I’m about 78% invested. The rest of my money is committed to various trades that have yet to trigger. I always place trades that kick in, when the stock moves ABOVE my buy point.
Posted by Ted at January 13, 2004 8:53 PM