Clear Minded Are You?

I was forwarded a nice excerpt today from a trader:

“Clear minded thinking is absolutely critical as a trader. I, personally, know how it feels to be in a trade and you are feeling great about it. Then, all of the sudden, it goes against you and you end up taking a big loss. The feeling is not a fun one, but you have to move on to the next trade and leave any negative thoughts behind. Otherwise, it will lead to your views on the next trade being skewed one way or the other. In the book Market Wizards, Paul Tudor Jones is being interviewed by Jack Schwager, asking about his timing. I don’t have the exact quote, my copy is at home, but Jones is discussing how a headline may read that he shorted the S&P 500 Index (SPX) two ticks from the top. He goes on to say how what the headline doesn’t tell you is that that might have been the fifth or sixth time that he had attempted to short it and had been stopped out on all the previous attempts. How many of you would have the courage to keep jumping in and shorting it after being stopped out two or three times, let alone four or five? While Paul Tudor Jones does not come right out and say “next trade,” he certainly is displaying this type of behavior when he continues to enter trades and continues to get stopped out, but he has the conviction to keep entering the trades. Even if you think I am not worth paying attention to, Paul Tudor Jones certainly is.”
Rick Pendergraft