We've all done it.... how do you deal with it?? Example: I stopped out of most of my remaining inverses yesterday. At the bottom. Of course today they skyrocketed largely without me. Frustrating! My solution was to re-enter small size this morning UVXY etc.. In poker it's called a bad beat. Got a buy top or sell bottom story? Let's hear it! Thanks
I've been doing it for years, buying at tops. The mental stories are too horrible to describe! That's why I bury myself in Amazon.com commercials from the 1990s. I project that energy into one of my younger alternate-universe selves, to send him the vibes to buy the damned AMZN at that single-digit price point. Permanent waves and stuff.
Look at your trading plan. Did you follow the plan. If you did it was a good trade with a bad outcome. One trade in hundreds or thousands. If you have a definable edge you'll eventually come out on top. Of course if you didn't follow your plan you only have one person to blame. In poker it's a bad beat. In trading it's a whipsaw. To quote Ed Seykota "Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money."
I kind of make it one of my quests/habits to attempt to hit mkt tops and bottoms, it's a challenge I enjoy because so many traders scoff at it. I have certain 'indicators' I use just for this purpose. However, this time, the top is allusive, it's wishy washy, the mkt is showing huge strength. My call was early September had been the top, that's when it switched imo. However since recently it has propelling again. Election day it ran hard - now to me it didn't make sense as the election results had not even started the counting. But anyway, re market top, atm I'm totally confused to be perfectly honest, the strength of the moves the last week or so just has me sidelined, I'm neither bullish nor bearish, I think we are in a chop stage.
Oh, one other point I'd make here... In poker it is a bad beat? Well, in your trading, it was a way to keep from bleeding money. You felt your positions were going more against you, so you used your Prudent Risk Management, as B1 likes to call it, to manage your loss. If the positions kept going against you another 5, 10% or whatever, you'd be patting yourself on the back. On this go, you are smacking your face with thorny rhubarb. I've done that too. It is counter-productive mentally. Tomorrow is another day, man.
To clarify, I'm more bearish than bullish but the immediate bullish signals are outweighing the bearish signals right atm. To me, a position trader, and I place multiple simultaneous positions involving huge sums (for a retail trader), I'm not game to commit money in this climate. To me, the mkt is too toppy, the risks are too high, there are not enough pullbacks in action to warrant getting in.
Don’t trade on price, trade on view. Do not make price your trigger. This is a behavioral issue that you need to systematically manage.
It's a rotating membership in a club no one wants to be part of. Pay the fees and hope someone takes your place. Don't stay too long
I suspect you are biased to a bearish sentiment and enter inverse etfs. Uvxy changes course very fast and hard to predict. Short on uvxy is a viable option if u can stomach the drawdown. Svxy is no longer attractive after the reduction in leverage otherwise it will also work subject to the same drawdown. Try short assuming ur broker allows it.
For entry, you have to think in terms of the future, not the past. It won't be "tops" if the price goes even higher and it won't be "bottom" if the price goes even lower. It's far better that you have bought at "top" or sold at "bottom" than not having entered at all and missed the whole ride because you wanted to wait to buy/sell at a pullback that never came. For exit, you have to think in terms of the present and not the future because one never knows the future. You kick yourself now for having exited too soon because the price took off and went higher without you or the price dived further without you onboard but the price could very likely reverse and went the other direction with you completely missing the perfect TP opportunity. It's always better be happy with the profit that you have earned now rather than be sad about the profit that you could've, should've or would've earned but might have never earned. If there is really something that you think you could improve with your TP target, work on it and apply it to your future trades but enjoy your present now. You have earned it. Go celebrate it, buy something nice online for your family and friends. Bottom Line: The most important is the future direction of the trade. As long as you are on the right side of the market, let the market decide how much you are going to earn and be happy with what the market gives you. Cuz if you are not, the market will be more than happy to take it all away from you and when the market does, it takes it away fast. You can try to manage your execution better but it will never be perfect.