So I made a wee bit of a mistake yesterday and it cost me a wee bit (ok… A LOT!). However, I didn’t let it keep me down. I just kept on going, doing the same thing, but only a little bit differently. Basically, I adapted my process. I changed a little bit of my strategy. A part of me still feels like I should have analyzed the error / mistake that I made a bit more, but I said, “What the heck? I’ll just keep going…”
The good news is that I did end up learning something in the process. My strategy has somewhat changed for now and I’m trying things in a different way.
Stock Analyses (slow, long-term, can be short-term, no real leverage):
- Analyze Company Financial Statements
- Benjamin Graham’s Number
- Relative Strength Index (RSI) Analysis
- Book Value Per Share
- Future Of The Company’s Market
Options (fast, short-term, leveraging of the underlying stocks):
- “Trade The Trend” or “The Trend Is Your Friend”
FOREX (blazingly fast, extremely short-term, leveraged [can be highly leveraged – 50:1]):
- “Trade The Trend” or “The Trend Is Your Friend”
I also tried a FOREX test account. I must say, the FOREX market is NOT for those who can’t handle some extreme risk. It moves FAST… VERY FAST and never really stops (it’s open 24-7). It’s leveraged and can be highly leveraged. This gives one the ability to make (or lose) HUGE amounts in an extremely short period of time (sometimes seconds). For example, on my newly created test account, I started with $100,000 (fake money) and managed to lose about $20,000 of my fake money in about 20 minutes. Granted, I was still trying to figure out how it all worked, but either way, with most stocks, it’s hard to lose that kind of money that quickly. On one of my trades, I think I lost $1,000 in about 30 seconds.
Options can sometimes be that devastating, but that’s what happens when you’re wrong many times. Also, with options you can be wrong many times and then be right once, and you’re right back in the green. Like most other things in life, the key is to start small and figure out your strategy, that way the losses don’t completely “sideline you”. This is the same with stocks, options, and FOREX. Also, play – using your strategy and try not to let emotions get in the way (that’s the hard part)… Otherwise, you’ll enter “the house of pain“…
Until next time… Enjoy! And never give up!