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Lou Mercer on Trading Strengths and Weaknesses

Lou Mercer discusses his thoughts on utilizing trading strengths and managing trading weaknesses.

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Some advice I like to give clients on their trading strengths and their trading weaknesses is printing out a chart and taking a look at some of the timeframes that they hold a position for. I'll often ask a client, 'How long do you normally hold a stock for?' And the answer really varies, and they say sometimes it's a couple days, sometimes even a couple weeks or a couple months. So by actually printing out a chart of the stock and circling where you're buying and where you're selling it really gets you to understand, 'Okay, am I buying on those up-days, or am I buying on the down-days, or if I'm selling something for a profit am I trading it very quickly? If something goes down, am I hanging onto the losses a lot longer?' And they'll start to see these different weaknesses they have as investors of wanting to hang on to their losers too long and trimming their profits too short, or trying to guess earnings by buying right before earnings, or waiting for a CEO to be on TV and they feel real good about the company and they want to buy in on those up-days. So print out a chart, circle where you're buying and circle where you're selling, and I think that'll help you get a better focus on your strengths and weaknesses.

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Important Disclosures

Past performance is no guarantee of future results.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions.

This discussion is provided for illustrative purposes only, and should not be considered an individualized recommendation or personalized investment advice. The strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation.

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