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A while back I read a quote attributed to Mia Hamm. As you probably know, Mia Hamm is the legendary soccer player who led Team USA to a gold medal in the 2004 Summer Olympics, a recent inductee into the National Soccer Hall of Fame and author of

Go For the Goal: A Champion's Guide to Winning in Soccer and Life

. The quote is, "Celebrate what you've accomplished, but raise the bar a little higher each time you succeed." This philosophy toward leading a fuller life certainly applies to your development as a trader, too.

Like most endeavors, trading involves a series of successes ... and a series of failures. To achieve true success, we need to learn from those failures, from our mistakes. Yes, when we make profitable trades, we need to strive to repeat that process again and again. But it's tough to continue to raise the bar to achieve ever-more-profitable trades. Raising the bar in that way can lead to disaster.

I think it's more important to focus on your mistakes than to raise the bar. Everybody deals with trades that don't work out. But some of those losing trades are a direct result of mistakes that we make.

We make an impulsive trade, hold a position too long or maybe don't honor the stop. Even the best traders make mistakes. But they learn from them. They resolve to avoid repeating the mistake. They don't really focus on raising the bar each time they succeed. Instead, they raise the bar each time they fail, demanding better of themselves next time.

Are you setting the bar high enough in your trading? If you are not, then you are probably treading water. But if you do insist on raising the bar when you fail, you are on the road to success.

Let's look at those reader picks.

Qwest Communications


took quite a pounding Monday, erasing almost the entire May run-up. If you like Qwest, here's your buying opportunity. With the stock testing the breakout point, we should see at least a bounce here. But if the bears manage to push Q below $9, I'd stay away until there is additional evidence that the selloff has run its course.


(ICE) - Get Report

initially broke above $135 in early May, completing the reversal of the February-March correction. The next breakout occurred at $140, leading to the current consolidation. So where is the next breakout level? At $155 -- that's where I'd buy. But until then, I'd use a protective stop just below $140.

Lyondell Chemical


began the year in the mid-$20s. Now it's about 50% higher and in tight congestion. I've drawn the current support and resistance lines, with a stop just below support and a buy point just above resistance. Those would be my action levels for LYO.



came public in March and has yet to see its opening price. But I've drawn a bullish right triangle that shows increasing buying aggressiveness on each pullback, and consistent supply at $20. At some point, the demand will probably eat through the supply at $20, creating a breakout. That's when I'd buy.

After breaking out of established resistance in March,

Annaly Capital Management

(NLY) - Get Report

has come full circle and is now back where it began. Notice how Friday's snapback reversal has been negated by Monday's weakness. As long as the support level at $13.90 continues to hold up, true believers in NLY should probably stay long. But if the stock falls back into congestion, it might be time to move on.

Be careful out there.

At the time of publication, Fitzpatrick had no positions in the stocks mentioned, though positions may change at any time.

Dan Fitzpatrick is the publisher of

, an advisory newsletter and educational forum dedicated to teaching effective risk management and trading methodologies to aspiring traders and investors. He is a former hedge fund manager and a member of the Market Technicians Association, and he now trades from his home in San Diego, Calif. While Fitzpatrick holds various securities licenses, he does not give recommendations to buy or sell stocks. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. He appreciates your feedback;

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