Money management
Managing
money and managing risk play an important part in my trading philosophy. Jim Farrish, a contributor to greenfaucet.com,
makes these points – and I agree with them:
- "manage your money – not the market or others opinions. "
- “It is easy to
get caught up in what the market is doing and forget about what you are doing.”
- “As an investor I
want to manage my money relative to what I want to accomplish. What others
think is interesting, but in the end it is your money, your goals and your
decisions that matter.”
- “Use a defined
strategy for getting in, getting out, and a defined target/goal. Know why you
are investing... Focus on managing your money based on what
you want, and let others do what they want.”
Comfort Zone
I
recently blogged
about defining your comfort zone and learning to trade within it.
Here is an
intelligent post from The Kirk Report with a different perspective. Please keep in mind that his advice is geared
to the experienced trader and rookies should first understand where their
comfort zone is before adopting his suggestions.
- “High achievers
(in life and in the market) frequently step
outside their comfort zone.”
- “The key for
today is to first understand what your comfort zone is and then take a step
outside of it.”
- “Remember, the market doesn't reward comfort and decisions that ‘feel’ good.”
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