Stock Doc: Stick to Your Guns

The other day, a trader who came to me for performance coaching missed out on taking a position with GlaxoSmithKline(GSK Quote). He watched his colleagues jump in early, as they looked at some intriguing data points. He jumped in as well, but when the stock price began to invalidate his initial theory, he abandoned his position and pulled out prematurely because of fear. The others around him stayed with their conviction and remained poised.

I told this trader, "If you want to be successful, you have to be able to trade like you would drive a car. You can't drive with one foot on the brake and one on the gas simultaneously. You have to be comfortable with speed and with placing just one foot on the accelerator once you know where you are going." Even if he was wrong for having followed his initial conviction about Glaxo, he would have been right for sticking to his guns about the data points that he incorporated into his decision-making process.