Kinetic Trader

Don’t Get Greedy

Ok so you picked out your stock and you look at a chart and find the point you want to buy it. You are patient and the stock hits your buy price and you buy it. You see it move higher and the stock is doing everything right. Some time goes by and you are up a lot.You are feeling pretty smart. Hey stock picking is easy.

Do you sell now and take the profits. Or buy more because now the TV stock pundits like it. Or just sell some and just see where the remainder of your stock goes because it’s just profits right……You decide to hold it all and just let it go higher and see what happens.

Some time goes by and the stock is even higher now but all the sudden the stock has a big down day. You decide to wait until it goes back to where it was and then sell it. The next day it gaps lower and you decide its come down too much so you buy some more and sell it all when it gets back to where it was a couple days ago.

The next week or so the stock doesn’t really move much and you figure all the selling is done and it’s ready to move higher so you just sit on your larger position(remember you haven’t sold any and added some on the “pullbacl” ).

The next week the stock slowing unravels and the stock is just above where you first bought it but with the extra shares you bought at higher prices you now have a slight loss overall.

Yikes, what happened……..Well I bet every trader has done this exact scenario when starting out and maybe even again later in their trading career.

YOU HAVE TO HAVE AN EXIT STRATEGY BEFORE ENTERING A TRADE AND UNDERSTAND SELL SIGNALS. Emotions are so hard with the stock market and can easily destroy a trading strategy so have a plan, don’t get greedy and follow the exit

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