2008Feb11

Emotions: fear and greed will destroy you.

Lately, I have been trading with fear of losing money. As a result, I have been taking profit too soon, not letting my winners run, and selling based on fear versus technical analysis.

Hindsight is 20/20. Live trading can be harder than you realize. Furthermore, it's easier to preach and harder to practice. Therefore, if you do as I say and not as I do, then you will become more successful than I.

Not everyone will show you his mistakes because everyone else only have good trades to brag about and no bad trades, at least this is what I have been reading. How is that possible?

I talked about DRYS here:

http://fade-me.disqus.com/2008feb06/#comment-128399

I even bought DRYS



Now look at the chart here:



I should have never sold DRYS at that price, but I sold it based on fear. It should have been sold at 71+ where the 4ema crossed below 21sma.

Here is another mistake -- averaging down when technicals were negative. This is based on hype and noise out there that I have not done a good job of filtering out. Also, greed took over. FSLR is so cheap and solars to the moon. Just because a stock is cheap, it does not mean it cannot get cheaper.



Here again, fear took over and I sold FSLR too early.



The technicals were never broken. I sold it at 168 because I was afraid of losing money on my purchase at 165.

Lastly, it's easy to recommend BUY and pump stock. But you have to realize, is the person eating his own cooking?