Frequently Asked Questions

Market Lab Report
Even though stock 'XYZ' bounced strongly, you think it won’t simply repeat the same price action of a couple of weeks ago and head lower?
My short answer is that I don't to think about something that hasn't happened. The long answer is that the idea of having to intellectualize over prima facie price/volume action in order to "think" it might do something other than what the price/volume action tells you to act on in real-time is distinctly antithetical to our way of dealing in the market and necessitates the use of a crystal ball, of which I have none, unfortunately. I prefer to just react to what I'm seeing in real-time rather than trying to conjure up ghosts in order to scare myself out of a possible winning trade. Having been in this business on all sides, retail/institutional/buy-side/sell-side, I observe that trying to over-think and out-think the market is a classic Wall Street mentality and tendency - I say think less, act more. You won't be right all the time, that's what stops are for, but you will miss 100% of the shots you don't take, that much I know for sure.

Published: Jan 5 2011