Many times we have a look at some thing and within the next two times it will not pan out, so we proceed. Quite often those thoughts put out, become winners, it simply took over a few days for the breakout, or what have you to occur.
Other times we get shook from a position with a small gain, only to find the stock soar higher a week after. Occasionally we take two dollars in earnings and we look in on the stock 10 days after and it is up 15 bucks. What’s all that mean to you?
So, just because we do not get involved with a play, that does not mean that you shouldn’t. Likewise, if we pull the plug on something, that does not necessarily mean you should. I believe one of the most useful things you can do to help yourself is maintain a list of the plays we put on the consider buy/short table. Next, if we proceed to new plays, reevaluate the older suggestions. More times than not our guess was correct, but the timing could have been off only a bit. Through the years we’ve seen this over and over.
Among the very successful traders I know takes notes of the consider lists, and loads them up on some kind of an alert he’s built for himself. Then, without having to look for a new play, he simply waits for a few of our previous suggestions to set the alarm off. It’s an intriguing concept for certain and no you do not have to get that involved. Only a pencil and a paper, a nice chart and you’re ready to go.
This is what happens. Lets assume we put out the XYZ company. We say XYZ is at 49.45 and we enjoy it over 50.00 as a long. Well Wed comes, and it does not take action, then Thursday comes and it does not do it. So, we’ve found two more stocks that look interesting and we shed XYZ in favor of the newer ideas. Does that mean XYZ is out of favor? Absolutely not! If XYZ breaks over 50, it is a drama, whether it’s in a day or in a week.
Please folks, increase your probability of making great plays by simply keeping an eye on the older recommendations. More times than not they’ll become winning plays, they simply need some time.