I've been trading for about a month with pretty small size for a prop firm and i've had one really big problem since day one. I don't get out soon enough in a stock thats going down sort of sitting there like praying that it goes back up . . . I know this is extremely wrong as the market doesn't care who's in what stock and hope plays no role at all. It's like I'll be doing really well for the first couple of hours trading like up $150 on 200 share lots and then i'll be like "well now i'm gonna go trade skf or a really volatile etf to make a lot more money!" Well not only has this stock done it to me badly or rather me to myself but i just can't dish it once the market is going up and skf is tanking . . . just sitting there waiting for that bounce . . . which is probably the worst habit in the world . . . so anyway I guess I just wanted to vent really and explain why i'm such an idiot and if anyone has had any similar problems like this themselves trading . . . Thanks
go into a trade with a plan and don't deviate from it, set a goal to exit and a stop loss to exit if the trade goes bad
this is typical newbie behavior, called ''hope mode'', that is a direct result of lack of discipline. We have all been there at some point or another. There is only 2 types of traders, the quick, and the dead.
So, you've been trading for a month. Yet in a couple of hours, you're up $150 on 200 shares lots. sounds to me like beginers luck...[or like you're taking gambles in high priced volatile securities...] Don't make the error of thinking this is easy, taking profits out of the market in a consistent manner is a very difficult thing to do, you'll need countless hours of practice, study and screen time. Only when you have plenty of experience you'll be able to avoid the error that you describe in your question. Learn from your mistakes, and take notes on them so that you don't do the same ones too often. and overall... try to have fun, if you like what you're doing, money is just a side effect.
Everyone has strong opinions regarding stops. Some traders swear by them while others find them useless. I personally find them useful while trading certain products. Early in my trading career, particularly with futures, I found myself taking losses much larger than anticipated. I would always let losers ride while locking in profits too quickly. As a result, I started entering stops as soon as I initiated a position. I knew what I wanted to risk on the trade and the decision process was removed from the equation. Have there been some horror stories of getting stopped out at the low or high before a huge reversal? Absolutely. I was stopped out at the exact low last friday in ES for a 20 tick loser before the massive rally fueled by the MBIA bailout rumors. There's nothing like losing $250 when a 27 handle rally happens immediately after in about 40 minutes. It crushed me mentally, but I could have reentered the market at any time but didn't. If I happened to be short a contract and didn't have a stop in or cover it would have been a massive loser. My point is it's easy to second guess when stopped out. If you lack the discipline to cut losses, and everyone has at some point in their career, then a stop loss will become imperative to your ability to keep trading. This is a marathon, not a sprint. $200 a day is $52000 a year. Think about implementing stops and I believe you'll be doing yourself a big favor, as well as putting yourself in a position to succeed.
It is not an uncommon problem at all. The bigger the loss the more difficult it becomes to pull the trigger until the pain becomes unbearable. You can give yourself all the pep talking you want but when you sit in front of that screen you just do the opposite of what you've been telling yourself to do all those hours prior to the actual action.
I posted about the skf a few weeks ago. Forget the thread. I too am a beginner and was given some great advice by an ET member. What are you trading something so volatile for when you just started? Stick to getting down a method that consistenly works and avoid the quick money before you lose your security deposit. Just my two cents.
Look at things in terms of percentages rather than dollars. Know your instrument and how much % in moves typically in a day to get a reality check. If typically it trades 2% a day, then why are you trying to get more, for example.
Don't sweat it man. There isn't one trader in the world who has not done this at one point or another. Learn from the mistake and move on. One of the key elements of profitable trading is that you have the power to allow your winners to run but cut the losses. This will let your PL run, when you do the contrary your PL takes a huge hit, for obvious reasons. Anek