I love listening to Bill Cosby as a standup comedian. My favorite from him is Bill Cosby:
Himself. The show is absolutely hilarious. There is one particular part, where, in one of the few times I've even heard him curse, he talks about drinking and drug usage. My favorite part went something like this:
"I said to a guy, 'Tell me, what is it about cocaine that makes it so wonderful?,' and he said, 'Because it intensifies your personality.' I said, 'Yes, but what if you're an ass****?'
I still can't read that without laughing. After following Twitter and social media for a few years, I got to thinking about that line. It doesn't just apply to cocaine. It applies to trading.
Trading is going to enhance your worst quality, plain and simple. Whatever your sin, your fault or your potential downfall, trading will find it and show it through.
If you are a proud person, then your ego is going to take over. If you are timid, then fear might rule your trading. Impulsive? Get ready to trade at the slightest inclination. Impatient? Good luck getting through those slow days sitting on your hands. Do you anger easily? Don't keep anything breakable near your trading desk. Greedy? That's the obvious one. By now, you get the point. Trading, at some point, will bring out your worst quality.
So as traders, we must learn to recognize what our worst quality is so it doesn't destroy us. You are kidding yourself if you think you can eliminate it. Simply learn to recognize when it comes out and then control it.
Weibo (WB) has been teasing me with a breakout for the better part of a week now. I was a buyer back on June 10, then added more two trading days later on the break over $20 to create a full trading position. I have to say that Weibo has been toying with me even since. I'm not sure I can remember a stock that sprints out of the gate so often, only to fade.
While I'm still looking for $24, this is one of those times that I have to lay down pride and greed and ego and concede that I need to revert back to a half position here, as the intraday action is volatile, and fading is a little much even for me. Fortunately, I'm able to net a buck a share, so that's not terrible at all, but far less than what I was originally anticipating and really only average when I think of it from a risk/return standpoint. This is a highly risky, highly volatile name, so normally I want to see a better return than 4%-5%. Stops should now be moved up to $18.75 on a closing basis.