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Stock Trading
CHAPTER 11:
Obstacles To Be Overcome - Potential Profits
Page 1
MENTAL poise is an indispensable factor in Tape Reading. The
mind should be absolutely free to concentrate upon the work;
there should be no feeling that certain things are to be
accomplished within a given time; no fear, anxiety, or greed.
When a Tape Reader has his emotions well in hand, he will play
as though the game were dominoes.
When anything interferes with this attitude it should be
eliminated. If, for example, there be an unusual series of
losses, the trader had better suspend operations until he
discovers the cause.
The following are the Tape Readers 7 Commandments:
1. Do not overtrade ! One may be trading too often. Many
opportunities for profit develop from each day's movements; only
the very choicest should he acted upon. There should be no
haste. The market will be there to-morrow in case to-day's
opportunities do not meet requirements.
(Continued after the box of related
articles.)
2. Eliminate anxiety! Anxiety to make a record, to avoid losses,
to secure a certain profit for the day or period will greatly
warp the judgment, and lead to a low percentage of profits. Tape
Reading is a good deal like laying eggs. If the hen is not left
to pick up the necessary food and retire in peace to her nest,
she will not produce properly. If she is worried by dogs and
small boys, or tries to lay seven eggs out of material for six,
the net proceeds may be an omelette. The Tape Reader's profits
should develop naturally. He should buy or sell because it is
the thing to do - not because he wants to make a profit or fears
to make a loss.
3. Don’t trade when the market isn’t acting right! The market
may be unsuited to Tape Reading operations. When prices drift up
and down without trend, like a ship without a rudder, and few
positive indications develop, the percentage of losing trades is
apt to be high. When this condition continues it is well to hold
off until the character of the market changes.
4. Get a broker you can trust! One's broker may be giving poor
service. In a game as fine as this, every fraction – every
second counts. Executions of market orders should average not
over one minute. Stop orders should be reported in less time as
such orders are on the floor and at the proper post when they
become operative. By close attention to details in the handling
of my orders, I have been able to reduce the average time of my
executions to less than one minute. The quickest report obtained
thus far required but 25 seconds. A considerable portion of my
orders are executed in from thirty to forty seconds, varying
according to whether my broker is near the phone or in a distant
crowd when the orders reach the floor and how far the identical
"crowd" is from his 'phone.
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