On another note, I am happy to say that Diane and I are expecting our first child. We are expecting in May of 2010. We just had our 18 week ultrasound and I am happy to say that our little baby boy is healthy. It's been such a miracle because we were told we wouldn't be able to have children and yet we didn't need the help of modern medicine to do so.
There are many lessons that I have learned from investing, but there are 4 that stand out to me. Matching your personality (strengths and weaknesses) against a particular trading approach is very important. Once you apply and understand this, these lessons will come in handy.
1. Keep your system simple stupid. I have created many programs in my day and I have found that the simple systems hold up better over time than the more complex ones.
2. Execute your system consistently... even when your system is losing money in the market. If your system has positive expectations (positive back-tested results), you will only have positive results if you follow it. I often see investors take a 10% loss (when his/her system indicates to hold the position) just to see their exited position make 20%.
3. Control your risk so you can continue to trade or your account may not be around long enough to benefit from the positive expectation of your system.
4. Find a trading strategy that produces positive returns over the long run.
Happy holidays and happy investing.
