Lessons learned from 2009

I had a good year. My self-managed 401K was up 17%. However, it's always good to reflect and learn from mistakes. Here are some of my lessons from the past year. I just started getting serious about trading this year.

• Stop Loss: It's good to know your exit strategy in case you're wrong on your pick or the market moves against you. Some recommend 7 - 8% as a good stop loss from your buy point. I usually use 8%.
  
• Volume: Volume is a good consideration as well. After you buy, will you be able to sell?
• OTC: I would stay away from OTC unless you really know how to trade them. FMNJ was one that looked good on the chart but there was no demand for buying at the point I wanted to sell. Thankfully all that I lost was the trade commission (which is small with Fidelity).
  
• Sector: It's good to consider the sector too. I had a position in JOYG and it had a great quarter but there was little price action afterward. I made a little but it seemed that the gold decline in price affected this company's results.
• Price Target: Analyst price targets can be helpful. In my opinion, the more data the better. I remember hearing a quote one time too to the effect of "don't fight the market". Price targets can give you an idea of what price you might be able to sell at.
  

Good luck with your 2010 investing and/or trading. Cheers.

Disclaimer: Please only use this information with a grain of salt and at your own risk / for educational purposes. I am not an investment advisor so please seek professional help if that's what you're looking for.
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