I wasn't sure whether to put this in Trading or Psychology. Moderators put it where you please. With my style of trading I have an objective entry point. This point will change from day to day, and also serves as my stoploss. Thus it is possible for me to enter and be holding a loser overnite, but still "supposed" to be in. And I am fine with that. I am completely comfortable. I sleep well. But if I'm in a profitable position, darn if I don't spend half the nite looking at it from every which way to see if I should "do" anything the next day. I think I know why. I think it is because my stop loss is finite and my profit-taking is more subjective. Sure I employ what I believe to be sound technical analysis of some sort to exit with a profit, but the exit is not as cut and dried as the stoploss. I'd like to hear from others.... are you more comfortable holding a loss, than a profit.
Inandlong, I think time in a trade is an important consideration. When I enter a trade, I have a specific timeframe in which I expect it to go somewhere. If it hasn't moved where I though it would within that time frame, the trade is likely to go against me anyway, so Im likely to exit and move on. Runningbear
I have almost the same problem.... and guest where it leads me? Bunch of small profits and one huge loss (each month !! ) I am still working to tame that deamon. It's all down to greed and fear. Cheers!!
I agree with this 98%. BTW In, IMHO, it is critical on doing both as efficiently as possible. This is a very difficuly problem for me given my methods, and I have no easy answer. FWIW, I am notorious for taking profits too soon and letting my losers go a while. I don't mind the losers, but I am THIS close to getting the other side tuned more efficiently...It bothers me to no end to see trade after trade of leaving money on the table... nitro
Amen to that nitro. Amen. That is exactly what is going on with me. It is not that I am taking big losses and small profits. I have that under control. I take small losses no problem. IT"S THAT I LEAVE SO MUCH ON THE TABLE SOMETIMES! TOO MANY TIMES!!! The good thing is that I, too, feel I am "this close" to figuring that part out. At least to reducing the feast I leave on the table down to a Hungry Man Dinner. When I get everything right and the trade just flows, and then I bail with a profit on the slightest hiccup only to see that thing quadruple what I took away.... Too many times, brothers.
My problem has always been my loosers hanging from a 30 foot rope and my winners sold while still just a seed . Its funny some of my best trades have been the ones I walked away from for a while. Come back and find them flyin high. This is the problem that I am working on the hardest. In looking back on my past trades its always that one big looser off the leash and the winners I cut off at the ankles that tip the profit meter the wrong way. I am starting to play with trailing stops and OCA orders more. I think this is helping. Nas
I think the other guys gave you good answers. I hate to take a loser home personally....drives me crazy.....and more importantly, many of them have turned into BIG losers over the years. These days if I'm in a loser I'm out for sure at the end of the day. I'll look at it with fresh eyes in the morning. You know, there's alot of theories about this, so I only speak for myself. But I like a to "clock" my trades. What I mean by this is that I expect them to "run" according to form. When they don't, warning bells go off. I won't let a trade "run" against form very long. Now the questions arises: how does the trade "run according to form"? Let's say I'm long. Let's say we approach a prior high. I expect the volumn to build...I expect to see size trading...not one lots. When we take the high out...I expect to see some acceleration relatively soon after the faders have spent their wad. What I don't expect to see is light volumn on the breakout. I don't expect to see the price turn and sprint back down through the spot it just broke out from. "Running according to form". Likewise, a trade that I'm in as of the close that's at a loss is obviously not "running according to form". I want out to reevaluate with a clear mind, unclouded by my position. But so that you don't think I always do it right....I carried a position with a small loss overnight on 9/30. I thought it closed poorly, and my loss was relatively small. I watched it like a hawk that night on Globex....sometime during the night it started down a little...and I'm patting myself on the back as I went to bed. In the morning...this thing was about 8-10 points against me....threatening to take the prior day's high out. Ouch! Talk about being out of position. I got lucky though...they brought it down on the opening and I was able to scratch the trade basically. Your post reminds me of what I regard as solid theory...don't carry losses overnight. OldTrader
I'm not a daytrader anymore though. When I was, nothing went home with me. Why should it, the day was over. Now that I trade a longer time frame, taking home a small loser, or even if the positon is against me intraday is part of the trade. That's okay with me.
Got to rambling there....forgot part of the message. One of the age old trading maxims is cut your losses, let your profits run....so something to that effect. And yet I read post after post here on the website that talks about a certain stop order (I think that's fine), but a certain profit objective as well. That I don't agree with. Taking a "certain" profit only insures a small profit. In my opinion, better to let the market work for you for a bit...give you what it can. Again, this takes watching to see if your trade is "running according to form". You know, a move takes place nearly always in a somewhat similar type of way. If you study the moves you'll find some of the keys. They always change a few things just to keep it interesting. But basically the market will bottom.....very few spikes...it takes some time to bottom. If it spikes it's probably just temporary. That doesn't mean I won't cover if I'm short...but at the same time I'll look for it to revisit those lows or near them sometime in the future. Once the base has developed the breakout comes. They always break it out at a time that seems inconvenient don't they? Late in the day so you have to hold it overnight! Or first thing in the morning on a gap! As the move progresses the price will, as we used to say in the old days, "back and fill". Maybe create that flag that Tampa calls a "short skirt". When it tops you'll know it. Ticks will be high. You'll be bullish. CNBC will be impressed. And it will be failing to make headway. It will build the top. Then it will break down...again, inconveniently. There's alot more to it....but make them "run according to form". Clock them. Let them breathe a little. Don't sell at the drop of a leaf. Understand their's noise between bottom and top....reasons to cause people to dump. When your position is moving according to form.....SIT, WAIT. It will probably just get better....and you know it will because you always sell to early. Now, if you're trading for unsound reasons then forget what I just said above. If you're trying to short it just because it ran up...that's a game I don't understand. OldTrader
I guess everybody fights this problem. I have done something really simple and it helped me immensely. I enter a trade from a combination of the usual stuff, tick ticki, trin, reversal candles, etc... After the trade is on, I switch my focus to a simple 5 period MA and look to get out when that gets broken. I day trade the SPY's. Changing focus after the entry to the MA saved me from getting out too early twice today for a difference of 1.47 in my favor. That's huge for me....