A Bad Trade Is Like A Dead Fish ...

One of the most important tools that a trader possesses is his or her mind. Attitude can either make or break you as a trader.

To become a successful trader it begins with believing in yourself and having a winning attitude.

Everyone wants to be a winner, at least they think so. Unfortunately, most are not willing to perform the tasks necessary to become a consistent winner.

Winners generally achieve success by being focused on a goal. Being focused allows winners to remain committed to the tasks at hand. Most winners perform a lot of hard work, including a willingness to deal with sometimes mundane duties. Most of all, winners perform with an "I am responsible for both my failures and successes" attitude.

So, where does the would-be trader start to become a success? By focusing on the tasks at hand. Most of all, treat trading as a business. And, as in any business, money management is critical.

Money management, next to trend, is probably the aspect of trading most overlooked by smaller investors. Man, by nature, is an optimistic creature and the amateur trader often acts instinctively. Unfortunately, this instinct or optimism is often the undoing of the smaller trader.

When a person enters a trade, he does so with the hope that it will be a winner. When the position goes against him, he keeps thinking (or hoping) "it will come back." He knows he should have a stop in place, but hope keeps telling him to stay just a little longer since everybody knows, "you always get stopped out the day the market turns." Eventually, hope turns into frustration, desperation and, finally panic which prompts the trader to issue a GMO (get me out) order.

If the trader hasn't learned his lesson by this point, he develops the "I have to get it back" syndrome. He generally rushes into another poorly planned trade, throwing good money after bad.

Winners show several different characteristics. They enter the market knowing they can be wrong and, in fact are wrong as often as they are right. They have learned markets don't run on hope. They understand markets tell them when they are right or wrong. When a trader is losing money and getting worse, the market is telling them to get out.

Bad Trades

A bad trade is like a dead fish:The longer you keep it, the worse it smells.

Good Trades

When a trade is making money, the market is telling them they are right and to let the position ride.

Don't ever do this ...

Winners don't add to, or "average", losing positions. They dump the trade and go looking for a new opportunity. Successful investors may add to the winning trades. When ahead, they press their advantage while remembering that at any time the market can turn on them and prove them wrong.

In trading keep your mind clear and do not get emotional about a trade. Remember you are not married to a stock rather you are in the dating game.

Learn more about common sense trading.

Avoid those dead fish.

Adam Hewison

President, INO.com

Co-creator, MarketClub

How to tell or refer a friend (short video)

12 thoughts on “A Bad Trade Is Like A Dead Fish ...

  1. Lumir,

    Thank you for your feedback and your comments. I can sense the disappointment in your words. However trading in stocks or futures is speculative there can be no guarantees. I think looking at our service and a short window such as maybe 20 trading days (we don't trade on weekends) is not a fair assessment.

    I think we do a good job in informing folks about the markets and how they work and how our Trade Triangle technology works. We always say to diversify into different markets as opposed to putting all of your eggs in one basket. Diversification to me, means trading in Forex, stocks and commodities. Using this approach you lower your risk of being wrong in any one market.

    The main reason that some of the stocks that did show a buy signals were just overwhelmed with the negativity that was and still is so pervasive in the marketplace. When the tide goes out all ships go down with the tide.

    This is probably not the answer that you want to hear but the reality is you have to look at the longer term results there are times with our trading we would have a negative month in a particular market. As we trade several markets we normally level out those losses with gains in other markets. Please see our track record that we publish and here's the link http://club.ino.com/trading/index.php?s=q4

    Once again thank you for your feedback and every success in the future.


    1. Dear Adam,

      Thank you for your feedback.

      Yes, you are right, but me too. I do not write you because I'm disapointed, it is my problem, I write you because of I think, that your triangle system could be improved. During of time, when bearmarket runs down, I would not create triangle and 100% up trend, if the stock is not outstandingly holding up or moves oposit the market for several sessions. Also will put comment, that market runs oposit, to be extreemly cautious with purchase.

      Have a great evening,

      1. Lumir,

        Thank you for taking the time to reply. We have been working very diligently to introduce in the very near future a new charting program that I believe will be a huge plus for members. One of the ideas we have is so original that we filed a patent on it.

        I'm sure you'll be hearing more about this program in the very near future.

        Every success to you,


  2. Dear Adam,

    I'm with Marketclub for about 30 days and I made several trades - Nvidia, Sun Microsystems, Supracor, Akamai,Cooper comp. etc.-Beautiful girls ... on triangles in 100 uptrend, but all of them bad trades-dead fishes. Main problem of your service is, that stock in your uptrend cannot hold up, if the main market trend is down. You should not offer stocks for a buy if the trend is down and others are selling! Now is maybe the main local bottom and change in a trend for a while, and your system could work for a while.
    You have very, good advertising, but the result for me is even worst than before I paid for your service. What I made within January and first days of February without your service is gone and much more.
    I'm not happy now and looking for ways, how to do it better.

    Your database is not bad, but You need to inform users better. You have too many triangles and it is not clear. You must have a wider borders for each trade, better find bottoms for entered positions.
    This is just a try - try this - try that, and money is gone.

    I'm simply not satisfied and waiting for your response.
    Have a great day,

  3. If you are wary of investing in something straight, instead of using a limit order, you can always sell a put inorder to buy the shares at a lower price that it is trading at. Plus you get paid(the premium) why you wait for it to move.

    If you want a tip look at CitiGroup's trading today. The call to put ratio shows a clear path which way the bet is going. I bought a couple of March 2.50 strike calls around $0.04 each in hopes of the March 12th fed meeting to left the market to market restrictions.

    Happy Trading

  4. Rich,

    It's always frustrating to get stopped out of a position. I was stopped out of a gold position today for loss. Losses are all part of trading and one has to accept that psychological pain when it arrives. I've been doing this so long that I just don't think about it. I get out when my stops are hit and move on to the next trade.

    With our Trade Triangle technology it is always better to get in at the initial signal price. I believe this is the lowest risk that you can have on a entry signal.

    I was pleased however that you had two positions on and that you were diversifying your portfolio. Obviously you may have other positions on that I am unaware of and I hope you do. Diversification into several non-correlating assets is the key to success.

    All the best and thank you for your comment.


  5. I think this is a myopic view in the current market. Good stocks of good
    companies prices have fallen. If you have done your DD and still believe in the companies future I see no reason to take advantage of
    lower stock prices in a oversold and psychologically disturbed market.

    1. Even if you are an investor, you have to set some rules. Why stick to a stock that is dropping, even if you believe in it. I personally invest in dividend stocks so when the dividend is cut I sell. I also started looking at the 50 day moving average. When a stock goes below, I sell (I sold GG today). Of course, these are not guaranteed methods but you avoid chasing down some stocks like GE or the banks until your cash reserve is completely dry.

      1. Fabian,

        I'm with you, rules of very important as is discipline. Without those two you are doomed to failure in the marketplace.

        Thank you for your feedback and all the best to you.


  6. Due to the current situation the river is full of dead fishes! Then risky and challenging trying to get out of bad smells.

  7. Adam, I see where Marketclub software usually works in the traders favor during a trend and when the trade is entered early in the move, but I have been stopped out twice in the last week with a short an the Yen and a long on Gold- with a ~$3000 loss. These aren't necessarily "bad" trades, but how much leeway should one give a trade to keep it from being a "dead fish"?

  8. For whatever reason most people have an aversion to bad smells...but most traders (myself included) just can't stop smelling it!

Comments are closed.