Lessons From 2008

As usual, the annual membership survey has provided some good food for thought. In that survey, one of the questions I asked was: "What would you say is the most important thing you've learned about investing and/or trading in 2008?"

Here are some of the replies I received:

• Knowledge is better than luck, but luck surely helps

• Don't try to guess where the market is headed - you'll always be wrong to some degree. Trade what you see not what you want to see

• Let the market speak before I get in the correct mindset to trade. If I don't, my losses mount

• Eliminate greed and take my time. Be cool

• Always limit your downside and don't be afraid to go short

• Markets do and need corrections

• Trade in smaller positions when strategies fail to work as they have in the past

• Don't just think about stop losses - but use them!!!!!!

• Patience and discipline to stay out of the market if one doesn't have a good idea

• Always believe the charts

• Gurus who predict the future about the stock market and particular stocks are no better than me

• Pay more attention to the technicals

• Thoroughly understand your own risk tolerance

• That there is no simple system that will work every time

• When profits come too easily, it is time to reduce risk

• I learned to trust myself and follow my own plan

• Comparing stock market returns from the past 50-100 years bears little insight into the next 10-50-100 years. We live in a completely different world and face unique challenges and unknowns

• Sometimes the best move is no move

• You must learn to think for yourself

• Trends, once established, last much longer than anyone expects

• Clear entry and exit points before the trade is critical

• Understand the various scenarios that the market may present you and then plan your actions for each of them. That is preparation, not prediction. Prediction tends to bind you to one point of view because when that doesn't come true, you don't know what to do.

• I've learned to seek out opinions that challenge my analysis and beliefs and ignore the rest

• Anything that "can never happen" can happen

• When the heat is on, you must stick to your plan and obey your trading rules

* This is only part one of five. Many more lessons will be posted at the members' only website.