ZF Capital

A tactic I used when I first started playing the market was to keep a diary. I strongly suggest you do likewise. In this diary enter only your losing trades. Winners always take care of themselves. While it’s nice to have both your pocketbook and ego enhanced, winning teaches you nothing. Losing can be the greaest teacher of all, if properly analyzed. In the final analysis, losing can actually lead to far more winning trades.

Write down the date that you bought your losing position and your reason for buying, and be honest with yourself as to why it didn’t turn out. If it was merely a whipsaw, say so. but if upon later examination you realize that either the volume was inadequate, or the relative strength was lacking, or the group was negative, or you were influenced by a rumor, write down that error. After several months look for a common denominator in your losses.

We all have psychological patterns. When you see what your particular destructive pattern is, it will be easy for your to retrain yourself and deal with it so your investing will become even more profitable.

– Stan Weinstein, Secrets for Profiting in Bull and Bear Markets

Lesson number one is consistency! For over 25 years, I have been consistent in my approach and discipline. This is so very important. Don’t be a fundamentalist one week, and a technician the next. And don’t follow indicator A one month and switch to indicator B the next. Find a good method, be disciplined, and stick with it. If it doesn’t regularly beat the market, then get a new method. But be absolutely disciplined and don’t ever abandon a successful method because you think this time things are different.

– Stan Weinstein, Secrets for Profiting in Bull and Bear Markets

The bigger the base, the bigger the move. And the bigger the top, the bigger the drop.

– Stan Weinstein