Do you guys trade with "circuit breakers" when you get down a certain amount you are done for the day. Or up a certain amount you quit. The problem that i have been having is i make money most days but i always seem to have Huge down days...i love being on a winning steak and I hate losing money for a day...i seem to get down and take bigger and bigger risks trying to make back what i lost and it avalanches into a huge losing day. I make money 4 out of 5 days but my biggest days are always my big down days when i seem to lose control. When i am trading well i have no problem stopping for the day and calling it a winner but i just don't seem to have the discipline to walk away from a losing day. I know this is the thing that is holding be back from becoming successful trader and i sure as hell don't need all of the stress that goes along with having huge down days. How do you recognize when you are losing control of you emotions and walk away from the computer when you are having a down day? Any help or info is greatly appreciated cheers z
I walk away for the day when: - you don't understand why your trades have all backfired on you. - you start trying to do 'revenge trades' impulsively to make up your losses earlier in the day ...and most importantly as a "Danger" signal for me is when... - you stop thinking/trading with a CLEAR MIND. For me, especially with the last one, I'd rather quit down $2K on the day, collect myself, and start again the next morning. After all, the market WILL be there -- you can always work to make up your losses when you're in a better mood or mental condition.
It took me over a year to figure this out. I knew how to make money and knew what a good setup was for at least 6 months without being able to take home paychecks because of what you're talking about. First, run a statistical analysis of what time you make and lose the money money. I found that on average, at 11:00, I'm up the most, and after that I churn. 30,000 shares is the sweet spot number, after that and trading after 11 is usually churning (for me). Being aware of the times you lose most will help. Next, leave at that time most days, and only stay if you are both A) up money and B) feeling confident that the day is a high intensity high volume day. If you do choose to stay, give yourself an amount of money which you will lose. Treat the trading after your sweet-spot time as a separate session with a seperate stop/max loss, which should be tighter. If you make it only $100 or so, it forces you to size down and build up some room to play around with, which is best. Once you start getting agitated and pissed off, leave the screen. If you're trading past your sweet spot time, and you take a single dumb trade, make it back in the next morning session. Go spend your money watching a movie or doing something else. Anything is better than battling and churning with the stock market. I cannot express in words how much the quality of my life has improved since beginning this process. Find a modified version that works for you, based on your strengths. As for as how do you recognize, it should be clear from your P/L and there should be specific feelings associated with revenge trading. For me, it's a lot of tension that comes to my body and an angry anxious state that makes me want to punch the market in the face for taking my money.
Do you keep a journal of your trades, electronic or on paper? Many people tend to make money M-Th and lose on Friday, this has in turn led them to not trade on Friday. Also, I used to take larger chances than I should of after 4-5 winning days in a row. I hope this helps some. Good Luck
great advice...discipline is the only difference from have a easy and wealthy life for a trader..and having tons of ups and downs and really feeling like you got the shit kicked out of ya all the time..... then i could cut back on my drinking!!
Newbies - why stop trading for the day??? How do you or anybody for that matter know that the next trade you miss will be the winner that pays off the losers, eeeh assuming ofcourse you have the ability to hold out the winner, chances are you will sell out with a small guaranteed profit. so what does this mean - welcome to the reality of trading - this is point at which the trading process separates boys to men - you have some growing up to do and it will take time and will not be easy and eeh no short cut either - good luck and enjoy
well a good reason to stop trading for the day is bad days usually get worse....when you are not trading well its cheaper to just quit,, regroup and live to fight another day
So tell us what you think. Will you stop when you have lost $X? When you are crying in the corner? When you can't see any moves/set ups worth taking? When you have lost %X? When you are puking in the trash can next to your computer? It looks like you are looking for an answer you agree with. First, it doesn't sound like you have a trading plan to start with. I suggest you research trading plans and move from there. Good Luck!
Yes, your trading plan should have the circuit breakers specified - both downside and upside. Usually the upside breaker is something like: Up $1000+ for the day, quit after 30% give-back ($-300+ in this case). So quit at $700 if you were up $1000 and gave back $300. Quit at $+1400 if you were up $+2000 for the day, etc. Downside should be set base on volatility and recent trading performance.