Trading Psychology

kevynt

Junior member
10 0
Paper Trade Exercise: Throw a dart, roll a dice, blindfold pick… whatever, make a random stock selection from a bunch of liquid, relatively high beta stock. Your strategy for trading this stock is simple:

- Purchase only when the main index is trending up (say two consecutive ‘up days’)

- 1% stoploss

- 7% profit (sell) target – you may let it run past this point and make a discretionary exit, but not let it drop back below the 7% target.

- If the stock price moves up, move your stoploss up to your purchase price so that the worst case scenario from this point will be a scratch trade (no profit or loss)

You will make a profit over the long term (100 trades plus). But you will not adopt this as a real life trading strategy – why?

Regards
Kevyn T
 

Skimbleshanks

1
2,325 16
Because of it being a long-term strategy (100 trades plus). Most peeps want their money NOW and are not prepared to wait for it even if is a guaranteed winning strategy.
 
 
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