Stock Trading Should Be Like Blackjack
The markets are taking a breather after a nice first quarter sprint. For some reason, I thought about blackjack. I can’t say I’m a pro, but for the most part, I can play with my emotions in check. How is that possible when I’m one of the most emotional guys around? There are rules to playing 21.
What ever your trading philosophy or indicators you follow, if you unemotionally trade following your investing rules, you will be fine regardless of the outcome. The dealer has a picture card, you hit. The dealer has a small card showing, you have eleven, you can double down. The dealer has a small card and you have a high pair, you can split them. Even if you lose the hand, at least you played your hand the right way. We should all apply this thinking to our stock trades no matter if we follow charts, follow through days, or CANSLIM, just to name a few.
You can’t win them all, but if you successfully keep your emotions in check, it won’t matter that you took a small haircut or left some money on the table. In the long run, you should be a more successful trader because you traded the right way, weren’t emotionally swayed by your last hand, and you don’t sweat greed or fear. It just wasn’t in the cards.