Over-confidence. Last week we went against our own pre-trade plan, holding onto EXC at $69 a share. We'd planned to sell below $70, but had a "hunch" the market was over-sold, and stayed in the saddle as the Down Jones Industrials plunged over 300 points, and EXC dipped to $66. Hanging on, playing that hunch, ended up working late Thursday and again Friday, bringing EXC back to $71.30 as we open Monday.I say the Number One reason people lose, whether they're trading stocks or choosing mates--anything judgemental--is this kind of thinking: I'm so smart because my hunches are good. Therefore, playing hunches usually works.
If I had a brain, or rather, if I was a professional trader, I would work my plan. Having spent experience and analysis-time planning my work, I would do what I said I would, sell at $69.
But I'm hanging onto my current, one-point loss. I'm still going with that hunch.
Number one, it's a LOT more fun.
Two, I feel lucky.
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