Taking ANOTHER ride on the Tractor at 53.61I just posted an idea about TSCO 4 days ago, and nothing has changed (except that I have 1 more profitable trade in it than I did 4 days ago), so forgive me for not going into micro detail about this one.
I also posted another Idea about NYSE:J a few minutes ago that shares many features with this idea. This stock is down almost 12% since mid-October. But in that time, there were 16 long signals (not including today's) and 15 of the 16 closed profitably, while the one still open is down a hefty 9% or so.
But even with that one big loss, when combined with the 15 winners, the average per trade return is .25%. Now that's not great, and it's downright TERRIBLE for TSCO, but making .26% basically 16 times while a stock is trending down is not a bad place to be. And that doesn't count the very real probability that the -9% trade will end up being a winner before it's all over. Every other trade EVER in TSCO has. Hopefully the one I entered today will join that illustrious list.
It's another example that with the right trading rules, money CAN routinely be made when stocks are in downtrends, and believe me when I tell you, that feeling might be better than the even bigger wins on the way up. Volatility is what washes most people out in trading, both monetarily and psychologically. To be able to trade GOOD stocks (that's important) during a downtrend without fear is a remarkable feeling. As one who lost a lot of money in my Early trading days when catching rides on downward slides, it's very liberating to not be worried any more.
The key is GET OUT. Make your money and walk away from the table before "they" take it back. My trade in TSCO 4 days ago only made a couple tenths of a percent. But I got out, and now 4 days later I'm buying TSCO back even cheaper than before AND I have that profit from the last trade in my pocket and not back in the hands of someone else, and I am not trying to claw back that loss.
It has revolutionized my trading and taken me to a different level of success. I believe that feature of how I trade is applicable to a lot of other methods of trading, especially when things get tough. I love to end these by saying "nobody ever went broke taking a profit" - but it's absolutely true. Not letting winners become losers is a real key to being consistently profitable as a trader. I think we might be in for a lot of downtrends in the not too distant future. Be ready for them. I am.
Per my usual strategy, I'll add to my position at the close on any day it still rates as a “buy” and I will use FPC (first profitable close) to exit any lot on the day it closes at any profit.
As always - this is intended as "edutainment" and my perspective on what I am or would be doing, not a recommendation for you to buy or sell. Act accordingly and invest at your own risk. DYOR and only make investments that make good financial sense for you in your current situation.
