Page 431 - THE MARKET WHISPERER

THE MARKET WHISPERER 42 7

From the thousands of stocks
traded, how can we choose the

best?

Around 10,000 stocks are traded on Wall Street. How can we choose the
best ones for the current day’s trading? A pro chooses stocks according to
predefined rules, not according to whim.

Do Your Homework

Before each day of trading, do homework. Start the day with a list of
candidates. Sometimes I get lazy and don’t prepare in advance. On one
such day, trading opened with a sharp gap up, and I had no candidates on
my non-existent list. As trading progressed, I quickly reviewed my favorite
stocks in search of a good opportunity, but to no avail. The feeling that
everyone else is making easy money and you’re the only one wasting time
is one of the worst psychological states for a trader. It is fertile ground
for stupid moves… and this mistake didn’t take long to become apparent.
I convinced myself that a certain stock was looking great, and with an
impulsive click, placed the trade. For a very short time I did well, but in the
long run I took a searing loss.

SMART Advance preparation for our day of trading contributes to
MONEY our psychological resilience and helps us cope successfully
with market conditions.

Important moral to the story: when you really want to hit the button,
you’ll find that you possess awesome powers of self-persuasion. Every so-
so stock looks great. Remember this: sometimes we profit more by not

trading at all!