That's what I do. But I've communicated with traders on this site and also read comments by traders on this site who say they always have a stop in mind, but never place it as a hard stop. I think it's paranoia they have about "the market" looking for their stop and stopping them out if it "sees" it. It's for those folks that I recommend some kind of hard stop, even if it's a distance from their mental stop, just in case of a rogue move.
Yes, I agree if you are trading futures or forex, a hard stop is a very good idea. If you are trading stocks based on a situational event horizon, then I think you should not have any stop. For example you are waiting for FDA approval. The MM's are going to be stop running. Your stop is if the FDA fails to approve, you get out. What NoDoji stil has to learn is that day trading is a good way to make a few hundred to a $ 1,000 per day. Swing trading ideas, is a good way to make $ 10,000 to $ 100,000 on the money you don't need to fund your day trading account.
Redneck- That was a great post -- that was literally me on the day i first posted "Crushed". Ive been doing this long enough to know where the landmines are, but every once in a while (lets say once every 3 months), it's like i get "battle-drunk" and end up firing wildly. This last instance has led me to a new level of self-evaluation that I believe will be the differentiator going forward. However, I realize the secret to long term success is not only knowing the solution but ensuring the deliberate application of said solution day-in and day-out without failure (and there is the challenge, but an eminently solvable one.)
I too have been struggling with this for a long time, and I think I am somewhat of a seasoned trader. My losing days have always historically been bigger than my winners, I just can't help that I will get rocked on a trade here and there. My problem is that I take my loss, but I am so frustrated with how much cash I just loss, I trade much bigger on my next few trades. I have been rewarded in the past I guess for doing this, so maybe thats why I seem to have a problem with it. I will make money 4 of 5 days nice, then drop all of them on a big loser. If anyone has any tips on recognizing the mindset I get into after that first brutal loss (its just that it happens so quick or something) please add to this. I dropped some money on a trade on friday really quick, just a bad entry then smack lost 40k in about 5 min. What did I decide to do, LONG BONDS. Bonds dropped 2 handles friday, and the stocks didn't budge, I wanted to be short stocks, so I ended up buying bonds, heavy. Got long 100-150 bonds and was out 15 ticks in 20min. Lost 70-80k on that trade. Dropped over $100,000 in the bonds on friday, had my worst day in a while losing over 150k in a single day. I was just so convinced I would get an uptick, but nope I will trade on and do what I always do, not about making it back, just becoming profitable in the long run. If anyone has any tips for me please share (especially dealing with sizeable quick losses), although I've been doin this for a while.
If you can look at a 5 min bar chart on the 10yrs and 30yr bonds on friday and it was a perfect setup for a fucking landmine, and the perfect day for a huge drawback because of the "uncertain enviroment" coined by RN. I like your ideas btw, you are talking about the same exact thing i've been thinking about for a while. And for you Bridenour, it just shows you that traders of all size and maybe all lengths of careers deal with it the same as you. I too have the same double-edged sword as you. Making on most of my trades, but sometimes losing big on my less often bad trades. I would lump myself in with all moderately sucessful traders in the sense that we are all (as human beings) risk averse. We tend to take less risk in profit than we would in loss. We are more willing to be risky when we are losing money, than when we are making money. And its okay, as long as you have many more winners than you do have losers. I do think it is possible to overcome this, and I will learn to do it as my career develops. I would say 90% of us are born that way, and even higher in women by nature. The other 10% is not as risk averse, and they make fine traders. They are able to naturally press winners and dump losers fast. Most people that take fast losses don't trade for much money, because psycologically it is hard to keep taking losses (IMO). It sucks but some of the 10% remain trading small, but are naturally sucessful. I think it takes a reversal of psycology, and maybe like an addict, maintain an active conciousness on a day to day base (i.e. being sober everyday, one day at a time).
This about sums up the psychology behind every blowup I would imagine. Al Brooks nicely captures the definition of price action the inescapable footprint of what is happening as a huge number of smart people are independently trying to make the most money that they can in the market. In trading, our individual opinion is only useful in convincing us to put on a trade. Once in, it's crucial to listen to the market and as soon as it's clear we're on the wrong side, either run away or join the other team. When is it "clear"? The moment the trade draws down our account the maximum amount we allow ourselves to pay per trade. BEFORE you put on the trade, know this amount and make sure you are entering at a price at which the odds of price moving to that level are less than the odds of it moving in your favor. I've been trading for 20 months and still have trouble with this and have been plagued with serious doubts about whether I'm cut out for trading, but if you also struggle with this as a seasoned trader, then I imagine my situation isn't hopeless :eek: