After being up about 11% for 2007, i am down an unbelievable 21% as of now. and all of the bad trades that caused this happened in virtually one week. this market is eating me alive and i have no idea what the hell to do next. i was considering making some riskier moves and putting all of my money into one stock at a time and hoping to climb my way back up that way. however, the only thing holding me back is the fear that i will make another damn bad trade which will cause me to fall even deeper. i badly need some advice or inspiration. i dont want to quit. i lost alot of money and im pissed... but i want to use that anger and make it all back.
If you don't understand why you are taking these losses and are not comfortable with your approach then take a step back and do not trade until you have a clear head. If that means taking the whole month off I would do it if I were you. The worst thing you can do is start increasing your risk by making big plays. Quit trading temporarily or substantially reduce your position sizes until you feel comfortable again. Believe me you won't regret it.
Everyone goes through a tough stretch. The key is to make sure that during these tough times, you must make sure you stay alive. Increasing the risk to make the money back would be the worst thing you can do at this point. Stay alive. Re-evaluate your trades and see what you did wrong. Tweak your system. Hang in there!
I was so pissed off about CNBC's rumors; Wallstreet is freaking sick; Buy rumors and sell facts; the oldest sick treat of wallstreet. Anyway; playing defensive is key; Bear market is trader's market; take your profits fast and be patience; and don't be afraid adding position when you are right.
One other thing... -21% is something you can easily recover from and is not the end of the world. However, if you start going wild trying to recoup what you lost you'll be amazed at how fast -21% can turn into -50%+.
I have been through this exact feeling a few times and looking back I have handled it pretty well. If you are like I was, your confidence is shot right now and you need a few winners to get confident again. Trade very small sizes and hit some singles again. It feels good and you can increase your position sizes later when you feel better about things. So wait for the best setup and trade small. Let your winners run as long as possible and cut your losses short immediately. It has worked for me in the past. I hope this helps.
Whatever you do don't let your emotions get to you or try to revenge trade your way back. Sit back, take a break and figure out what went wrong. Take some small positions and take your time. You'll get it back. I blew out twice before I learned some good lessons. When it hurts its something you don't forget.
Looking at your previous post on AAPL and ABK it appears you are gambling, not trading. Until you figure out the difference pick your spots carefully, don't go against the overall trend, and trade small. Good traders will decrease position size when they are losing, not increase them. It also helps to ignore your % gain or loss on the year, when you fire up the computer tommorow, consider yourself flat and go from there. Your previous gains and losses should have no factor in determing your next trade.
I completly agree but that might be the hardest pill to swallow since you start thinking about all the stuff you could have bought with the money you just lost. Just try to make one successful trade with a small position size to reassure yourself that you haven't lost it.