Like everyone else reading this blog (or most of you at least), I am very much looking forward to starting 2012, especially to start my 2012 technology stock picks again. Don’t get me wrong, I love doing these picks, and I’ve certainly missed doing new picks in the past 3 months.. That being said, I’m nervous about doing the next ones. Why?
Putting It All On The Line Again
Many say that traders are only as good as their most recent returns. I don’t entirely agree but I do understand the idea behind it. Just think about it this way. The last time I opened a new trade, I knew that the difference between an amazing trade and a bad trade would likely be finishing 2011 with a return of over or under +50%. I think you’d all agree that while the return of 75% or so is incredible, being a bit lower would still have had a huge impact. I can’t imagine anyone thinking much less of me simply because the 2011 would have been “only” 50%.
Back To Square One
That being said, in a few days, I’ll be right back on the start with a 0% return in 2012. That means a few bad trades to start off the year would have a huge impact on the return obviously. Things might start off well as they have in both 2010 and 2011 but they could always turn out bad as well. Let’s face it, even with these great returns, I’ve made almost as many bad trades as good ones. The chances of starting with 2-3 losing ones is not that small.
What Happens If I Start Off The Bad Track
The big question of course is how it might (or not) affect me if I made 3-4 bad trades to start off the year. How much would I question myself and would it affect how I would do my trades? I would like to think that 3-4 trades would not be enough to shake my confidence but that is probably underestimating the emotional aspect of trading. That is also why no matter how things go, I will probably discuss the psychology of trading a lot more in 2012. Hopefully I won’t become a case study of how things can go wrong:)
Not Much I Can Do At This Point
I will likely open 2 or 3 new trades next week and at least one more the following week. That should help “diversify” my risk. If you are interested in these long and short tech stock picks, please be sure to join our free newsletter about technology long and short trading here:
That being said, I hope you will have a wonderful weekend, ,
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