Is perfection in stock picking possible? No, and it is not necessary. The more you are a stock picking trader than an investor hunting after dream stock picks, the less perfect your picks have to be.
The buy and hold investor relies on what he picked. He has to. How much easier could his life be if he were accepting that he is so and so many times dead wrong and just go on?
The Forex adept has also to rely on what he picked. There is nothing to pick in Forex other than Forex itself. So, he picked Forex and gets tortured by it until he switches to stocks.
Interestingly, the same is often true for the trader. Many times he behaves like the stock picking value investor closing his eyes coloring the harsh trading reality pink. Most traders trade the wrong thing! Too long they are clinging to what once seemed to be a good trade and try repeatedly to tame this damned horse that runs in the wrong direction or to nowhere.
If they were trend traders, that would be the right method! One veritable strategy in trend trading is to try it again and again. Finally the trend trader gets on a trend with this method. It all comes down to cutting your stop losses short in the meantime. If the trend is marching on, it pays off to enter it. Simple.
But if a trade goes the wrong way, things are different. This is no more a good trading situation and no reason to waste your trading skills. Just try to pick the next favorable situation. Not all trending stock picks mutate to a swing trading Eldorado. Many just fade away into random fluctuations.
If a stock pick fluctuates randomly or goes south, you picked the wrong thing. There are better chances and your are missing them.
The perfect stock picking system is one that combines trading with picking. If you can admit that you are being wrong most of the times, it is easy to switch to the next stock.
And that’s the way the best stock pickers work. Simply accept that your hit rate will be far below fifty percent. Of course, your trading system should reflect that. It should know about the value of the stop loss method. Finally you will hit your home run.
Conclusion, there is no perfect stock picking system or stock picker. Instead the best stock pickers are often the worst ones. They just accept it!
Here is the master stock picker of this type.