Lessons Learned

Some trades result in losses. This is a fact of life in the markets.

As a trader, whenever I have a loss, even a small one, I go back over the trade to see what lessons I can learn from it.

In the case of Thursday's morning's broad bearish swing, my losses came on positions that I had opened on stocks that had mature bull phases. By mature, I mean that the stocks had been in bull phase for awhile, and in some cases, in fact, the main indicator I use, the parabolic fractal efficiency (pfe) line, had peaked above 100 and was flatlining.

So, the lesson I take from this: The less risky trade is to open a position upon a new phase change. Opening into a mature phase runs the risk of a turnabout while the price is still near the entry level.