Trust Your Trading System

Down 630, Up 430, Down 520. Are we having fun yet? It’s been a nauseating few days. Can anyone say volatility? Should you buy? Should you sell? Should you cry? Should you pray? I don’t have an end all be all answer because it really depends on you. No matter what happens, you should remember to trust your trading system.

What’s Your Cup Of Tea?

Buy and hold? Trend Following? Gold? Options? Forex? Real Estate? I’m not going to go into the factors that an investor should review to decide on their system. However, during these roller coaster times, you really have to stick to your system through good times and bad. If you make decisions on the fly, you begin to chase, act emotionally, and your critical money managing moves will be ruled by greed and fear. We all should agree we make our best decisions, investing or otherwise, when we are calm and logical.

Playing Cards

In blackjack, everyone has their tried and true system of hitting, standing, doubling down, and splitting. In poker, everyone has their system for betting, raising, checking, and bluffing. Like I said earlier, you play your best cards when you are calm and under control. If you are on tilt, or are swayed by greed and fear in stock talk, you behave irrationally and before you know it, you are out of chips, bounced out of a tournament, or get a 50% haircut on your portfolio.

Sell In May

For example, Sam the Financial Samurai practices Sell In May And Go Away. He looks like Warren Buffet right now, but during some better times in June and July, if he didn’t trust his system and his portfolio moves, he might have lost sleep and second guessed himself. I’m sure he’s sipping his Mai Tai on an exotic beach right about now.

Final Thoughts

After weeks of carnage, I started second guessing myself. On Monday night, I actually said, “I should have been shorting!” Bad Buck! It was just a thought. Sometimes it’s hard not to use 20/20 hindsight. When we popped back on Tuesday, I actually thought, “I should have bought some stocks. It’s obvious we won’t go too much lower below Dow 11000!” Bad Buck! Just a lot of internal chatter, but still, I have to keep this in check because one day, I might act on it. Don’t let this happen to you.

Stay Inspired!

Yakezie Stock Market Coverage

If you’re getting overwhelmed by the talking heads, check out these posts from some of the top personal finance bloggers around. Who needs CNBC?

Buy Like Buffett presents The Dow Was Up 429 Points So Now Is The Time To Buy Right?

Retire By 40 presents How To Deal With The Schizophrenic Stock Market


Money Cone presents Market Meltdown, What Should You Do?

The College Investor presents Volatility Strikes – How To Take Your Mind Off The Chaos

Canadian Personal Finance Blog presents Anybody Seen My Financial Ass

Darwin’s Money presents You Should NOT Be Losing Sleep Over This Market Crash

The Amateur Financier presents Mixed Bag Monday – Of Debt Downgrades and Credit Scores

Money Crush presents Sell High Buy Low

Financially Poor presents After the Storm: Nerves Replace Relief

Money Green Life presents Stock Market Sucks: How To Protect Your 401k During Market Downturn

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13 Responses

  1. MoneyCone says:

    Very nice roundup Buck (and honored to be included). It is fascinating to see other bloggers’ views on the market and how to deal with it!

  2. Nauseating sums it up quite nicely. I have been sticking to my system and it has served me well so far despite all the volatility.

  3. Thanks for the mention!
    It has been a crazy week, but I think we are still OK in the long run. I tend to quit checking my account during these roller coaster days. That make it easier on my stomach. 🙂

  4. It’s difficult to make an argument for an efficient market, or otherwise after this past week. Madness.

    Where can I get those patches?

  5. Financial Samurai says:


    The good thing is that I’ve never met anybody who is online that has EVER lost money in the markets. We are ALL Waren Buffets! Lol.

    Thanks for re-highlighting the call in May. Def glad I locked it in and have bought in two tranches this past week. Giddyup!


  6. I’m also a huge proponent of knowing your strategy and staying the course, regardless of whats happening with the market. If there’s a huge pullback, like there was last week, and you have extra cash and the stomach to ride it out for a very long time, view the pullback as a “sale” and buy some more. Otherwise, just stick to your original plan. That’s always been my take, and its served me well.

    • Buck Inspire says:

      Sounds like you have a plan! I wish I had some extra funds to take advantage of the sale. Staying the course as using margin or credit cards to buy now would be a little too reckless. Haha!

  1. August 13, 2011

    […] Buck Inspired – Trust your trading system […]

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