Very early in my teenage years, my dad used to tell me that we, men, have to make firm decisions and not change our mind as and when we like. That’s not manly. Only girls do that (sorry ladies…). Been in the trading world for a couple of years, I came to realized that in order to be profitable, you need to trade like a girl! Not only must you change your mind regularly, but must do it quickly!
Changing of mindset is easier said that done. Every traders will have their own feel of where the market is heading, after been bombarded by news and the internet. Once you have that bullish or bearish feeling, it’s very difficult to change even if the market is screaming at you to change. To be successful in trading, we need to be flexible in how we look at the market (I’m still learning to be one!). I remember reading a story about George Soros, one of the most successful hedge fund manager. He was attending a party and was talking to one of his friends about how bullish he was with the market, especially a particular company that he was interested in. A few weeks later, his friend came to know that the company that George Soros was talking about was making a loss and the stock price crashed. Worried about his friend, he called Soros, thinking maybe if he can help him. To his surprise, Soros was very delighted, telling him that he had made a killing with that stock. His friend asked him, “How did you make money when you are bullish about a crashing stock?” George Soros replied, “Oh, I change my mind. I shorted the bugger instead!” Making profitable trades is never easy, especially so in today’s market. To increase the probability of making such trades, not only must we stick to our trading plan, but we must be flexible enough to understand where the market is going. Do not assume that the market will continue to rise/fall when you read a lot of good/bad news about the market. You never know when the market is going to change its mind.
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