This is NOT a post about Silver, Apple, Netflix, or Margin Calls
- Posted by chicagosean
- on May 5th, 2011
“Silver is screaming!” Now it’s Traders are screaming.
“Steve Jobs is dying!” Now it’s the $AAPL short sellers that are meeting their maker.
“Netflix can’t possibly be worth that valuation…” one Trader utters as he streams another movie on his home theater system.
As someone who watches the StockTwits stream all day, I can tell you without a doubt that the three previous sentences are responsible for countless losses amongst amateur Traders, and probably a blown-up account or two in the professional realm.
Traders with “hot money” have a tendency to jump into the latest “hot” arena. That is where the “action” is. For some properly trained traders with solid risk control parameters in place, this can often be a profitable venture for them. However, far too often, its the players who are struggling or undisciplined who wade into these shark-infested waters with the goal in their head to make a quick score to make their week or their month and make up for trading transgressions elsewhere. You can guess the results.
Trading is often boring – or at least it should be. So it’s easy to be distracted by the drama of parabolic blow-off tops and the prospect of shorting perceived over-valued momentum stocks. If that is your trading plan, then fine, go get it.
But if like me you’ve got a plan that works for you, leave the excitement and the drama for the other guy. Let the big winners strut around and let the losers hide in shame. Focus on what YOU do. Keep it simple.
[ok, maybe this post was kinda about Silver, Apple, Netflix, and margin calls]
Side note: For a couple great posts on past Silver manias, check these out from Peter Brandt:
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.blog comments powered by Disqus
Sean McLaughlin - Editorial, Curation, & Investor Relations Solutions at StockTwits. Also, former Member of the Chicago Board of Trade who trades his own account in Boulder, Colorado. More »
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