Trading is not only watching the mkt and stock prices all the time and making buy and sell decisions. Waiting for the results, accessing your conviction and gut feeling is an essential part of trading. At times it is necessary that we don’t look at the price, the movements as it can (in the very short term) be going against us. That short move can shake us out of a good trade.
Watching the price action, can make you re-evaluate, change your decisions and alter your plans. Only to find out a day later that your earlier decisions were the best ones.
I for me, currently, I am convinced that GOOG will be down further in the next few day, my reasons.
It has moved up a lot $50 in a day (last Monday too fast) and is bound to correct itself.
The overall mkt made a drastic move that day, and will correct itself (which will have an effect on GOOG as well).
The company is reporting earnings tomorrow, i.e.,Thursday, from what I have seen, the last couple of times it reported, is that the stock goes much lower just before the earnings announcement. Which again points to my view that it should keep going down until the close tomorrow.
4. After buying puts on the stock yesterday, and again this morning, the stock has been moving downward, a proof my hypothesis is holding so far.
Although, I have a hypothesis and a strong conviction, I am afraid, that I will start looking up the price (which I usually do) and see the price go up, I will get out of my position, in panic and see the stock tank just after I sell my puts. So for now I am resisting these strong urges and am not following the stock’s movement.
For me lot depends on this GOOG trade’s outcome. Emotionally, I can hardly contain my self from watching stock price and taking action, but at the same time I realize that I need to wait and see and accept the outcome.
The little voice in my head could convince me of something I did not plan on doing. The bottom line is I have taken a position and should be ready to accept a gain or a loss without constantly clicking at the price tick by tick. So far today, I managed to not look at the price action and will force myself to do the same for the rest of the day. It will be difficult at times like this when the mkt is making big waves, but is very beneficial.