Have you ever seen the movie, The Illusionist?
It stars Ed Norton as a magician/illusionist who performs unbelievable tricks.
I thought of it when I wrote the title of this article.
Let me be clear though, this is not a magic trick.
This is actually a mistake that can cost you a tremendous amount of money.
When it’s explained it will seem obvious and you might question how anyone can make such a mistake.
Let me assure you it’s one of the most common mistakes in trading.
For the person that trades between ten and two hundred times a year this can be the difference between making trading a hobby or making it another source of income.
So how does it work?
How does thirty cents turn into three thousand dollars?
Simple.
I’ll give you a real life example.
Before a student of mine became my student, he saw how it could happen first hand.
Here’s what’s unbelievable, it was on a hundred shares of stock.
He really liked a particular stock when it was around fifty and thought it would go to seventy or eighty.
One day the stock traded a little below fifty and he put in a bid at 49.50.
Well the stock did hit 49.80 but that was as low as it would ever go. It stopped at that level and started going up and a month later he couldn’t resist any more and bought it at 70.
By the time he got in touch with me for the first time the stock was back at 60!
Unbelievable. Missed the ride up for twenty points (2,000 on a hundred shares) and then got caught in a ten point down move (1,000 on a hundred shares).
So there it is, the thirty cents that he wanted to save by buying it at 49.50 instead of 49.80 cost him three thousand dollars.
This one trade served as the basis for our entire lesson.
If you’re looking for twenty or thirty points then why should thirty cents make a difference?
Even more to the point, if you have a bid in that’s not getting hit then that is a sign that you are right about the stock!
It is strong and that’s why your bid is not getting hit.
When I am bidding for a stock and the bids are not getting touched that makes me want the stock even more.
I have no problem paying up for it.
Don’t let pennies stop you from making points.
See how this can apply to your own trading and maybe you can create your own market magic!
All the best,
Adam Mesh
Have you ever seen the movie, The Illusionist?
It stars Ed Norton as a magician/illusionist who performs unbelievable tricks.
I thought of it when I wrote the title of this article.
Let me be clear though, this is not a magic trick.
This is actually a mistake that can cost you a tremendous amount of money.
When it’s explained it will seem obvious and you might question how anyone can make such a mistake.
Let me assure you it’s one of the most common mistakes in trading.
For the person that trades between ten and two hundred times a year this can be the difference between making trading a hobby or making it another source of income.
So how does it work?
How does thirty cents turn into three thousand dollars?
Simple.
I’ll give you a real life example.
Before a student of mine became my student, he saw how it could happen first hand.
Here’s what’s unbelievable, it was on a hundred shares of stock.
He really liked a particular stock when it was around fifty and thought it would go to seventy or eighty.
One day the stock traded a little below fifty and he put in a bid at 49.50.
Well the stock did hit 49.80 but that was as low as it would ever go. It stopped at that level and started going up and a month later he couldn’t resist any more and bought it at 70.
By the time he got in touch with me for the first time the stock was back at 60!
Unbelievable. Missed the ride up for twenty points (2,000 on a hundred shares) and then got caught in a ten point down move (1,000 on a hundred shares).
So there it is, the thirty cents that he wanted to save by buying it at 49.50 instead of 49.80 cost him three thousand dollars.
This one trade served as the basis for our entire lesson.
If you’re looking for twenty or thirty points then why should thirty cents make a difference?
Even more to the point, if you have a bid in that’s not getting hit then that is a sign that you are right about the stock!
It is strong and that’s why your bid is not getting hit.
When I am bidding for a stock and the bids are not getting touched that makes me want the stock even more.
I have no problem paying up for it.
Don’t let pennies stop you from making points.
See how this can apply to your own trading and maybe you can create your own market magic!
All the best,
Adam Mesh
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