Investing & Trading Lessons: Part II

When members were asked "What would you say is the most important thing you've learned about investing and/or trading in 2007?", this is how they responded:

• Being a risk manager is more important than being a good stock picker

• Suspect the motives of everyone on TV when they plug a stock pick

• The market is manipulated and rigged by the investment banks and the power elite who control the Fed and appoint men like Paulson when he was instrumental in creating the credit crisis in the first place

• Good trading requires a real feel of the market. Knowing a good company is not all that is needed to trade successfully. One must match that with executing the trade at just the right time. Timing is incredibly important to be a successful trader

• Most of the purchases I made this year were in a panic mode that I was afraid the train was leaving the station, only to watch the stock pullback. If I had waited, I would have had better results with less stress of looking at red numbers

• My instincts are correct - I just need to trust them

• Don't panic. Stick with your strategy. Believe in yourself

• A few minutes or hours can easily wipe out weeks or months of gains. It pays to be extremely mindful of that fact at all times. Fear easily wins out over greed

• I discovered that trading success is totally internal, and it depends on your ability to adapt to ever changing market conditions quickly

• Trade your edge, not the news

• Stay true to my intuition and skills and leave the news good or bad in the background

• With the enormous amount of information available on any topic, it is very important to have pre-filtered and professionally evaluated information available. This is why high quality blogs like this site are so valuable.

• Controlling one's emotions is critical - most of the dumb decisions I made were emotional ones

• Only losers watch TV during trading hours

• You need to often change your approach because the market is constantly changing. A style and trend that worked last year may not work this year

• How tough it can be to make money in a difficult market

• Take time to understand the other side of trade.

• Don't overanalyze it. More information doesn't mean more profits

• When I'm feeling real good about the market, I'd better think about getting out. The opposite is also true

• I relearned "it isn't what you don't know that hurts you, it is what you know that just isn't so."

• Identifying stocks with strong fundamentals first and then using technical analysis for entries and exits is a smart approach

• The technical analysis rulebook is always being rewritten

• When in doubt, give weight to both volume and price

• Trade the trend

• When you are the most scared, opportunity is staring you in the face

• Time big purchases to the broad market corrections to make really good money

• Patience!

• There is tremendous value from monitoring overbought and oversold conditions

• Make large buys only when the market is severely oversold

• Take profits more quickly. Volatility is here to stay

• When my portfolio is doing well enough that I feel like I should brag to my friends/family, I need to sell, sell, sell

• Make no mistake, the market is a bitch. It will eat you alive if you let it

• Cut losses short

• I do not have to always have a trade on to be a successful trader

• Some times it is more profitable to sit on the sidelines and wait for the good opportunities to come to you

If you missed it, please see Part I of this series.