Friday, July 10, 2009

The Kirk Report

The Kirk Report

Lessons Learned

Posted: 10 Jul 2009 06:56 AM PDT

Lessons Learned
In the mid year membership survey I asked the following question:

"So far in 2009, what is the most important thing you've learned about investing, trading, and/or the markets?"

Here's how members responded to this question:

  • Success takes longer than expected

  • That you must learn to trade and trust yourself and not to become so dependent on the opinions of others, which ultimately keeps you from becoming the best you can be

  • Keep it simple

  • The very best profit opportunities occur in the midst of extreme emotional sentiment

  • Always think opportunistic verses too bullish or bearish

  • Persistence and dedication to a daily routine is key

  • Developing an edge is the first step for trading successfully. Without that, disciplined trading will only make sure you gradually losing money

  • The market is one unforgiving bitch!

  • It is challenging to find non-correlated markets

  • You have to respect the market even if you think it is under some kind of manipulation

  • Keep your eyes open and powder dry

  • If you fall in love with a stock keep 100 shares and let the rest go

  • I've learned to be patient in waiting for my patterns to appear

  • The value of ETFs

  • The importance of finding special situations that will be profitable no matter what the market does

  • Stay away from light volume when the only thing trading is the black boxes

  • The importance of focusing only on one technical setup in order to improve one's skill set

  • I now think that buy and hold is a serious mistake

  • Think big and think long term

  • Don't try to predict the markets

  • Don't be afraid in bear markets, just another opportunity

  • The odds are stacked against the retail investor

  • There's no such thing as a sure thing

  • The harder I work at it the more likely I am to succeed

  • Conserving one's capital is vital

  • I know the rules - I just need to notch-up my discipline

  • Smaller entry positions can be helpful

  • Opportunities are everywhere

  • The market is primarily psychologically driven

  • Trade with the trend instead of trying to pick tops and bottoms

  • Know where and when to get out before you get in

  • As Johny Cash put it "You got to walk that lonesome valley, you got walk it by yourself. Nobody else can walk it for you. You got to walk it by yourself."

  • The difficulty of avoiding over-optimization/curve fitting

  • Overtrading can be, and often is, a recipe for disaster

  • To breathe before executing a trade

  • Trading is not a profession for pessimists

  • Never feel confident even when winning. Humility is a good thing

  • You need to be quick and brutal with the trading decisions

  • It is okay to sit out a potential move - risk management over reward chasing

  • Don't bet the farm in either direction

  • There is no consistent logic to trading the market

  • Some trades need to be taken when they appear, not just when you are ready

  • There's no rule that quality stocks must go up

  • Don't chase any overbought stocks

  • When a sector (like financials) look so hopeless as it did in March there is potential to make a lot of money if things turn around even just a little

  • Hope is a four-letter word and has no place in a trading strategy

  • Patience. It is ok to sit out once in awhile

  • Wait until you have an proven strategy supported by data before trading for keeps

  • Anything can happen. Trading is all about probabilities

In case you missed it, here is Part I. I will have more lessons to share next week.