The One-Trick Pony

No, I’m not talking about the Paul Simon movie in which the familiar singer, song-writer plays an aging rock star trying to create a new album in the face of an indifferent label and a talentless producer. (And yes, he’s even struggling to save a failing marriage).

Geez, what an awful plot. And while the movie was a sure-fire formula for mediocrity, the term’s actual meaning bears fruit for the active trader.

A one-trick pony performs the same trick, over and over again, much to the delight of excited circus-goers. I am admittedly a one-trick trader. I play a small group of stocks (OK, not just one), over and over to the delight of my wallet.

Knowledge and Practice Make Trading Perfection

As in all things, practice makes perfect. The more experience you have trading a certain stock, the greater your confidence in trading it, and greater confidence products greater success.

When you trade a few stocks again and again, you become very accustomed to how they behave in the face of a variety of different market circumstances. You develop an actual “feel” for what’s going on with a stock, and what it’s likely to do next. And that’s the stuff that trading magic is made of.

So how do you find this group of stocks? Don’t worry, the longer you trade, the more familiar you’ll become with how certain stocks behave. You’ll dog many of these stocks all day, day in and day out, and come to know their every nuance.

To give you an example, there is one stock that I day trade almost every day. I know that if I buy it today, and hold it overnight, at some point tomorrow I’ll earn at least 2 points on this beauty. And I know that because I make that play so often.

Keep Your Focus

The bottom line? Focus your mind on the stocks that make money. And even more important, figure out WHY they made money. Was the stock showing you a side of itself that repeats over and over? If so, try tagging along for a repeat performance.

On the other hand, are there stocks that frequently cause you to lose money? That’s OK. Just dump them from your trading radar and look for more friendly stocks. Repeat the actions that consistently make you money and you will consistently come up on the winning side. It doesn’t get any simpler than that!