Successful Investors Differ From Speculators By Having A Plan -queer as folk

Investing Phil Storer explains the need for sticking to a solid business plan. Stock and commodities veteran Phil Storer says that true investors develop a trading plan and adhere to it, with the result that their market experiences are smoother than the roller-coaster rides of speculators. Storer says, whether you’re an investor or a speculator depends a lot on your approach to risk. He compares the trading community to a group of kids at a diving board. While one child runs and jumps off the board and into the pool without a care, another reaches the end of the board but assesses the situation before diving. A third, more-cautious kid looks down, steps back, hesitates then struts out again–before pinching his nose and stepping off the board. Several kids climb onto the board, only to lose their nerve and scramble back down the ladder. Storer says each trader has his own level of tolerance for risk. Some are speculators who jump in feet first while others are routinely cautious. Some participants find trading overwhelming and prefer to let intermediaries guide their decisions. Speculators often get their ideas from a friend, a salesperson or the media. If they like an idea, they tend to embrace it with unbridled enthusiasm, with little concern about how to time a transaction. They simply want it done now. Risk and profit objectives aren’t considered, mainly because the speculator feels the sky’s the limit for profits. Investors may get their original ideas in the same manner as speculators but they won’t act until a plan is in place, Storer says. Successful investors consider investing a business and understand that their returns depend on having a solid plan. They’ll want to know where and when to buy, and they’ll address risk and set targets. Having a plan doesn’t guarantee a win, he notes. But win or lose, the investor will walk away with the ability to take advantage of the next reasonable opportunity. Storer says as traders study and learn the various methods presented in his book, they’ll want to develop a checklist for the ones that they decide to use. That way as a trade is planned, details critical to its success won’t be overlooked. He says there have been many times in my own experience that after a trade went bad I looked back and identified lack of attention to detail as the reason for failure. Several reasons exist for making a list before entering a trade. One is that it slows you down and gives your system time to breathe before you plunge, Storer says. A list will help move the trade away from the emotional arena. Another reason is the accumulation of confidence that comes with sticking to a good plan. When a trade is well planned and still fails, it’s often simply the randomness of the market being exercised, he says. And when a loss occurs, if the trader knows everything was done properly he has no reason to beat himself up or feel guilty. The knowledge that we behaved correctly will allow us to go right back out and give our business another opportunity to succeed, Storer says. He is Director of Trading for the commodity division of Dillon Gage Inc., a full-service brokerage firm based in Dallas, Texas. About the Author: Phil Storer is the director of trading for the commodity division of Dillon Gage Inc., a full service brokerage firm based in Dallas, Texas. For a review copy of Chalk Talks for Traders Easy Xs and Os from a Proven Market Pro, or to arrange an interview with Storer, please contact: Jo Trizila, TrizCom, at (972) 247-1369 or (214) 232-0078. To pre-order Chalk Talks for Traders Easy Xs and Os from a Proven Market Pro go to: .www.chalktalksfortraders.com/ . Article Published On: ..articlesnatch.. – Investing 相关的主题文章: