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Thursday, September 4, 2008

Self Confidence, Ego and Bias

Quotations of the Day:

"Self-confidence is the first requisite to great undertakings." - Samuel Johnson

* * *

Challenge Accounts:

Investing Account Balance:
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.51

Personal Trading Thoughts: Waiting and watching on the LHV8 - Lean Hogs, October contract. Waiting for the setup.

Personal Investing Thoughts:
My DRIP remains on for all of my stocks. As I've been saying: I have in mind that there are signs of weakness in the midst of this relief rally. In addition, September is a month of extreme seasonal weakness. Therefore, I will wait. Sometimes, the best thing you can do with investing, is know when to just wait.

But let's be clear. Seasonals only point to a tendency. Not an absolute rule. Last September, we rallied through the whole month. We'll see.

Yesterday, we discussed the emotional "Battle Scars" of the market.

Now let's discuss a way to avoid those battle scars. Let's talk about self-confidence, ego and bias. Because without self-confidence? You will sabotage your money management strategy ... (video included)

Tomorrow, we discuss that pesky 2% risk rule ...

* * *
Challenge Project Account Balances and
Money Management Numbers:

Investing Account Balance:
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.51

Total Trades: 6
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $56.63
Average Loss: $74.27
Accuracy Rate: 33%
Average Reward: $175.34
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Up + $53.84

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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