The Cowardly Lion

Gross: +$644.00
Net: +$536.24
Loss From Top: 0
Trades: 80
Shares Traded: 89800

Stocks Traded Today (net profit/loss):
AMR Corporation (AMR): +$344.69
Alcan Inc. (AL): +$120.46
Amdocs Limited (DOX): +$89.65
ConocoPhillips (COP): +$67.05
Genentech Inc. (DNA): +$56.59
EMC Corp (EMC): +$30.90
Schlumberger Limited (SLB): -$2.21
William-Sonoma Inc. (WSM): -$2.53
Hornbeck Offshore Services Inc. (HOS): -$51.41
Equity Office Properties Trust (EOP): -$117.47

My trading today reminded me of the Cowardly Lion from the Wizard of Oz.

The Cowardly Lion looked like a lion, sounded like a lion, and walked like a lion, BUT didn't ACT like a lion because he was cowardly.

OK - so what does this have to do with my trading?

I seem to be a trading, it sounds like I'm trading, and I go through the motions of trading, BUT I don't ACT like a trader. Just like the Cowardly Lion, I seem to be lacking courage.....courage to hold on to my positions.

All this time I kept telling myself that I have to have patience when it came to holding winners. BUT, I think I may have been confusing a lack of patience with FEAR....fear that my position could reverse or that I'd lose the profits that are currently staring me in the face.

So what kept happening today?

I'd get into a position and it would go my way. But then prices seem to stall or a certain amount of time passes and I feel a great need to get out of my position because I fear I'll lose the profits I could take now.

Shortly after I'm out, prices continue to move....but without me on board.

In my mind, I kept using the excuse "Well, I could book profits now and if prices continue moving, I can always get back in!"

But ultimately what ends up happening?

I get out, and when prices continue moving, I don't get back in because I'm too fearful that prices could reverse at any time (again, fear working against me!) and I end up waiting for the next level break on the stock.

Midway through the day I tried to get over my fear by exiting about half or two-thirds of my position whenever I felt uncomfortable and holding the rest until the charts say it's time to get out or my mental trailing stop is hit.

BUT wouldn't you know it, I always seemed to be exiting that remaining half or third of my position for a loss. Either things reversed (and the charts told me to get out) or prices would blow past my mental trailing stop and I would find myself chasing prices to exit my position.

Sheesh! I got caught a couple of times like that....definitely not a good exercise in trying to overcome that fear of loss (in the back of my mind I kept saying "See? Told you so! You should have exited everything when you had the chance!").

This was more true on some of those thinner stocks...one second you're up 25-cents on a trade and in the blink of an eye you're down 10-cents.

But all in all, I'd say it was a good learning day in that I drew a defining line between patience and fear. All this time I've been saying I need patience, but what I needed was to visit the Wizard of Oz so that he could give me the courage to hold onto my positions. This, above all else, is probably the reason why I'm not as successful as I want to be.

The one aspect of courage that did improve today was the bigger share sizes on some of the thinner stocks. I'll continue to work on that front as well.

Boy did I miss a lot of good moves on AMR Corp (AMR) and Alcan Inc (AL). Both of these stocks were really strong today, but I was constantly jumping in and out (just like a Cowardly Lion).

No good trade and no bad trades.

Lemme see if I can step it up a little bit in the next little while....

Good Trades
None.

Bad Trades
None.