Sup guys im trading with a small cash account with about $1000. Obviously i have a limited number of trades i can take due to limited funds, so scratches is something i have to avoid. That being said its affecting my judgment when im in a stock. i would hold my losers longer knowing i wont be able to get back in. And my winners are small due to small position size trying not to use too much capital. Does anyone has experience in avoiding scratches? or are scratches inevitable as a day trader? thanks
Scratches aren't always a bad thing. When in doubt,get out. If you're feeling uncomfortable about the way the price is behaving close the trade.
I agree. I don’t necessarily think scratches are bad, just something I feel like I can’t afford to do because I won’t be able to get back in until funds settle. But l guess I’ll have to deal with it until I add more money into account. Thanks
If by scratches you mean just getting out at break even or a small loss, I wouldn't know how to trade without doing that. I started with a small account years ago and while the money is a pointless amount, a winning trade still feels good. I would just trade based on a % of the account per trade as if you had a $100k if in the US with a no commission broker. If you are only trading a $50-100 at a time and get into an issue with unsettled funds you might be trading too much. Ultimately, you are going to have to add to the account with something other than compounding $1k so there is no reason to not treat it like much more right now. Of course, that would limit what stocks you can trade because of the price but any instrument or ticker becomes familiar if you watch it long enough.
There are only 4 outcomes for every trade: large win, small win, small loss and large loss. The middle two are basically scratches and probably are the most common outcomes. Try to avoid the last outcome while wait for market giving you the first outcome.
Welcome. I am a new day trader. If I have a scratch day I consider it a win. Scratch days are good if you are a trend follower who avoid big losses and hunt for a few good trends. Since the market doesn't pre-announce when trends are going to show up next, I need lots of scratches to catch one. Good luck day trading.
There are so many things wrong in what you wrote that you should stop trading. For many reasons, day trading is not for you. Maybe later. But not now.
I try but it’s very time consuming knowing I’ll have to wait another trading day so that leads me to hold a bit longe. But I understand thanks im open to hear you out on that but if you can’t state those reasons your comment is irrelevant here. Thanks though
i would reccommend you develop a method, management rules and disciplined mindset. take a setup and paper trade it 30 trades and track the wins, losses, and break evens. then enter the market based on the setup. its really about being ok with losses and accepting them as opposed to avoiding them. if you have a process and risk management where every stop is less than 1% of account size and a set target, ie. 5x your risk. ie. risk $200 to make $1000 on every trade, you can still make progress breaking even and losing several times. what's important is that you are following the market rather than predicting it and then trading your setups. be sure to test a method rather than randomly testing multiple ones. you can start with a simple 50 day moving average and buy it when price hits it. again test it and be consistent.