Someone told me the key to being a decent golfer is to play your average shot. For example, if you're 200 yards out, over water to a small green, and you could hit that shot one out of ten times, but you could lay up and pitch it on in two 80% of the time, take the lay up. Over the long haul you'll do much better. Most people go for it because they remeber the one time it worked out and they made the birdie on that hole. If that trade is good for 10% gain 8 out of ten times and good for 30% gain 1 out of ten times, take your 10% and know you played it smart. If I could practice this philosophy 100% of the time I would be much better off (in golf and trading). -JPB
What rs7 said. I'll also add, that if you were looking for 10% and got it... you should always be happy with that. Same as with Alain's example... if you set stops and they were triggered, but then the stock shots past it, you shouldn't get into a pattern of doubting yourself. Of course, if this is a familiar pattern, then you can look at ways to adjust to your plan, like resetting stops along the way up, or selling half your position to lock in profits. Or in Alain's case... get better at re-entry... looking at the stock afresh. As Alain said, it's a mental screw to think that you can get all of any swing. The goal is to be happy with grabbing part of it.
One time Daniel was actually humble enough to see the folly in calling Darkhorse 'stupid'... But he has been right about everything else since then! Publias
Publias, I don't know if you were being facetious or serious, so I don't know how to take your comment. But.... "right"? I don't think being intentionally antagonistic is a characteristic you can call "right". You know I said "thank god I'm an atheist". But calling Jesus a "moron" is just intentionally looking for bad feelings. It is obvious to us all that Chasinfla takes his beliefs seriously, and is entitled to. To attack his beliefs in a mean-spirited way is not "right". I may have disagreed with darkhorses religious beliefs, and his political beliefs, but I respected his right to freedom of expression. I think Chas is pretty much in step with darkhorse on these issues. I don't think he should be insulted by daniel for his beliefs. Daniel could have argued his point without the "moron" comment very easily. There was no reason for this other than to be inflammatory. Really not necessary. Just my opinion. Good post on your Mistake Trade Publias....been there myself
If you're daytrading, I think the most important rule other than cutting your losses is taking your profits. A good profit that you let melt away because you wanted to hold for more is in my opinion more destabilizing emotionally than seeing a stock run 2 points higher after you sold for a .50 gain. Well either case is pretty infuriating, but at least in the second case you've come away with a gain on your trade, as well as the knowledge that you had the right idea in the bigger picture. The funny thing is, the only times it seems I'm capable of being short a stock a few ticks off the day's high or being long right at the low is if I'm purely in scalp mode, and hence taking very small gains relative to the eventual move. Conversely, on the days that I'm actively looking for position trades to take, I usually find my entries are quite bad relative to the day's range. Mixing time frames is a difficult thing to do, and having seller's remorse is really a symptom of not being sure of which time frame you are most comfortable trading. If it really bugs you to see stocks make multi-point runs after you've exited, and want to change your time frame in effort to capture those kinds of moves, be prepared to see MANY of your future open profits go back to zero or worse; that just comes with the territory of the longer time frame.
I'm sure most all vets have been there at some point... BUT like I said I am only human, and as such extremely fallible It has been years since I did something like that and I suspect it will be years until I do it again... Plus she was gracious enough to let me off with warning this time As for Dan; PUTZ and that is about as many words as I would take to talk about someone of his disposition... Plus he is on my ignore list so I did not see his 'jesus' post to Chasin... BTW; facetious incase I did not make myself clear... PEACE and goodtrading my friend, Publias