I hope the little series of articles over the last three weekends provided some ways in which traders can cut losses and let profits run. The fellow who initially suggested I provide some information on the subject suggested it would be a cop-out to say that there are probably as many ways to cut losses or let profits run as there are traders, but as you could probably see if you read the articles, there are a wide variety of ways in which a trader can accomplish the goals. Much is dependent upon the creation of a plan that is specific to your own needs. In both books, "Trade Your Way to Wealth" and "Smart Investors Money Machine" I talk about the need for such a plan and in different ways show how an individual can construct a plan specific to his or her needs, age, station in life, goals, family situation, and financial status.

Discipline is a first key. Most would-be traders, I find, are unwilling to even engage in the discipline of learning how to create a plan let alone working on its creation. It's my guess that their likelihood of sustained success falls somewhere between slim and none and leans to the "none" side. Creating the plan, however, is only the first needed act of discipline.

As many of you may know, I just had the privilege of traveling through Ireland, an absolutely beautiful country. During our stay, we took the opportunity to tour the Jameson Irish Whiskey Distillery. In addition to learning how Irish whiskey is distilled, we learned how Mr. Jameson went to riches, then to rags as a result of world events totally beyond his control, but recovered to regain his riches. As a result, he was awarded a crest and a motto. The motto is: Sine metu. It means without fear. That is how Mr. Jameson managed his ultimate success and the ongoing success of this now internationally renowned company.

Sine metu is a motto that all traders should take into account in my book. If we trade through fear, undoubtedly we will make bad trades. We will cut profits because we may be afraid of a pull back instead of having an exit strategy such as those I discussed in the last article in the recent series or we will let losses run because we are afraid to take the loss and move ahead. With a disciplined approach and a pre-determined exit strategy in place we have the ability to increase our chances of success and proceed sine metu.

As an aside, for any who have shown interest in private coaching sessions, I am now booked through the rest of the year. I take no more than one student a month so if you are interested, you might want to contact me for bookings in early 2010. I am continuing the one day reduced price special in Arizona for January, February and March. It is 1/3 off the regular price for a one day session.

Good Trading!
Bill Kraft

Our Success Trading service delivers quality trading ideas for the elite investor that has the financial wherewithal and market nimbleness to profit on small moves in a stock's price. Become a member and you will be provided with email and/or PDA alerts intended to provide you with the opportunity to make many, many profitable trades.

Here is a play from the Success Trading Group:

FPL Group Inc. (FPL)
Our Success Trading Group currently has an open position in FPL Group, Inc. (Ticker: FPL). We like FPL at its current price for a new trade position.

Have a great weekend and we'll trade next week.
Success Trading Group Team

Our Option Trading Service is for conservative traders that understand leverage principles and enjoy the challenge of options trading. We focus on powerful option trading strategies that place volatility and momentum in your favor. And we pride ourselves on always minimizing our losses!

The Option Trader service utilizes standard trading in Puts and Calls as well as strategies using Leaps, Straddles, Credit Spreads, Calendar Spreads, and Naked Puts. But no matter how sophisticated a strategy may be, we ALWAYS know our downside potential on every trade.

Here's a look at a trade Bill is currently working on:

optionsXpress Holdings, Inc. (OXPS)
I do have a position in this one, and I like what I am seeing. It does need to break the nearby triple top resistance at which time I would consider buying some in the money LEAPS calls to hold as long as the stock can remain in the uptrend that began when the stock came off the July lows.

Good Trading!
Bill Kraft