Investing & Trading Lessons: Part III

When members were asked "What would you say is the most important thing you've learned about investing and/or trading in 2007?", they said the following:

• Let the market tell me what to trade instead of forcing trades on favorite stocks

• A few really good ideas tend to be worth waiting for

• There are always opportunities. Don't be too critical about a missed opportunity because if you do, you'll miss the next one

• Wait for the dips before buying - all stocks drop eventually. Wait for those opportunities

• Really good opportunities do not come along every day. Being more selective has been very helpful to me

• Not being in the game is part of the game

• Ignore the daily noise. Focus on long-term trends instead

• Movement created by news is short-lived. Stick to the unemotional facts

• I've learned to ask myself "Why am I placing this trade?"

• Don't make rash decisions in the stock market if it's not part of your overall game plan

• Monitoring sector strength and trends have been helpful

• At any given time there are sectors that are in favor. By picking leaders in these popular sectors and using point and figure charts to get a big picture of the company can greatly improve your odds. However, when the trend or sectors change you need to change with them

• There will always be another stock and another opportunity. No one stock has to be bought

• Do what Buffett suggests (i.e. If you don't understand it, don't buy it.)

• No cash = no opportunities

• There is tremendous psychological value from restarting a portfolio by wiping the slate clean

• I tend to buy too late and sell winners too soon

• Learn how to not care about being right or wrong after making a trading. Instead, learn that making money from quality decisions is the goal

• Trading is risky business that requires discipline, patience, and an ability to shrug off poor decisions

• When the heat is on, keep your cool

• Entry points are critical (even for someone who isn't a trader)

• I've learned I'm too risk adverse and gravitate to "value" situations too early

• I should not get easily discouraged when my stock picks don't perform initially as I thought they should

• Never marry any stock. When the technicals send warning signals, pay attention

• Don't fall in love with a winner. When it stumbles, sell it

• Good traders know how to take a loss

• It is easier to make up lost opportunities than lost capital

• The importance of position sizing

• I learned to avoid trading on days that don't show momentum one way or the other

• Pick your entry point and be patient

• Don't chase a position. There are always better trades

• Don't get too greedy. There's nothing wrong with small, but consistent profits

• Bulls make $, bears make $, pigs get slaughtered

• Cut your losses early and often

• Don't hesitate to sell a position to preserve profit (or avoid taxes) if you think it is going to move lower

If you missed them, please see Part I & Part II of this series.