CAN VOLUME BE RELATIVE? TAKE A LOOK AT THE TWO CHARTS OF HARTA BELOW. UP TILL 23RD DECEMBER, 2011, HARTA WAS MOVING SIDEWAYS AND THE SIGNALS WERE NOT SO PROFITABLE BUT AFTER THE BUY SIGNAL ON 23RD, THE PRICES JUST UP UP. THIS IS AN EXAMPLE OF HOW GOOD PROFITS CAN BE MADE BY TREND FOLLOWING.
BEWARE OF OUR EGO. PEOPLE WANTS TO BE RIGHT SO THEY TAKE PROFITS QUICKLY AND HOLD ON TO LOSSES HOPING IT WILL TURN INTO PROFITS. TO QUOTE VAN K. THARP’S “ CONSERVATIVE-WITH-PROFITS-AND –RISKY-WITH-LOSSES BIAS” - PEOPLE WANT TO TAKE PROFITS QUICKLY AND GIVE THEIR LOSSES SOME ROOM. THIS GIVES THEM THE ILLUSION OF BEING RIGHT, BUT WHAT THEY ARE REALLY DOING IS CUTTING THEIR PROFITS SHORT AND LETTING THEIR LOSSES RUN.
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