Mid-Year Resolutions

Why do we make resolutions on January 1 every year, only to forget about them two weeks later? Who says we can’t evaluate our lives on a regular basis and look to make changes TODAY? One trait of highly successful people is that they are always looking to improve. Instead of getting complacent, they constantly seek ways to enrich everything in their lives: health, relationships, spirituality, financial goals, etc.

Seeing that we are halfway through the year, RIGHT NOW is a great time to assess your progress and to see if you are on track towards achieving the resolutions you made on January 1. If you forgot them, why not make new ones RIGHT NOW?

Since this is mostly a financial blog, I would like to focus on some trading suggestions:

1) If you are unhappy with your results in the first half of this year, DO SOMETHING ABOUT IT! One quote that comes to mind is: “The definition of insanity is doing the same thing over and over again and expecting different results.” If you are repeating the same patterns in your trading and losing money, then make changes!!! One suggestion is to mimic success. Find a trading style that you like and then study someone who is successful at it. For example, if you are a value investor, study Warren Buffett, Benjamin Graham, and David Dodd, etc.

2) Keep a journal. The most successful traders do post-analysis of their work. For example, look at the trades you made this year and find out your average gain, average loss, percent of winning trades, etc. Why are these statistics important? Because traders are wrong a lot. So you better make sure your losses are smaller than your gains. In other words, it doesn’t make sense to buy 2 stocks at $20, take a $3 gain on one and a $5 loss on the other. Go back and figure out your numbers; it can help you improve tremendously.

3) Stock selection. I always say: “Wall Street wants to see growth!” Make sure you are buying companies with strong earnings and sales growth. After you find these companies, do your best to buy them when the market is healthy, take profits into strength, and cut your losses when you are wrong. Keep in mind that loss cutting is the most important part of this equation. Have the courage to take losses and accept that it is part of the game.

There are so many other suggestions to pass along, but my main goal in writing this post is to get people motivated. Trading is an intense business for me and it is important to always protect your confidence. If the first half of this year was a struggle for you, now is not the time to hide your head in the sand! Keep your head up and learn from your mistakes. If you are doing well so far this year, don’t get complacent! Continue to stay focused and constantly look to improve.

Since we are halfway through the year, RIGHT NOW is a great time to evaluate your progress and make the necessary changes in order to finish the year strong. Deep down inside, I truly feel that we all know what we need to do to improve. The key right now is having the discipline and the courage to actually do it!

Follow me on Twitter @jfahmy

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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