The key to trading is to keep losses small. I've ingrained this in my head, but in practice, there are situations where I can't keep those losses so tiny. In my mind, as a scalper, I don't like to take losses > 3 cents. First, let me explain my situation and frustrations: Typically, I will trade a volatile issue like DNA or VLO. When I take a position, I like to take a position where if I go long, I like there to be someone at a price level underneath me that I can sell into if I'm wrong. If there's a large order in the book, I try to keep my order not too far from them (usually 1-3 cents), so if I'm wrong, I can react quickly and sell into the levels beneath me. (Same for shorts, just the price level above me has to have a lot of sellers.) This strategy USUALLY works, but when it doesn't, it's extremely frustrating, since the losses get big. If I do the mental math and figure out in a slow upward advance that I think the trading will stop at a certain level, in some cases the advance will happen so fast that the specialist will basically print off the entire block and the stock will burst against me. The same for downward advances. Also, I find that in a stock like VLO, if someone comes into the order book with an order for 8000 shares or more, the market seems to rapidly move with people building 10 cents worth of cushion all the way out from that order, so I have an EXTREMELY tough time getting filled anywhere near that guy's order. If I do get filled near the large block order, the odds are that the stock is going to move against me so fast it hurts. I'm finding that when the stock bursts against me and I'm trying to panic out, it screws with me psychologically so bad because then I want to get a winner to fix the situation. The longer I go without getting a large winner, the more desperate I become, and it becomes a downward spiral. I'd like to ask other scalpers how they manage to consistently keep their losses under 3 cents. I know there are guys who can do it, because I've seen them do it. Thanks to all who assist me. I'm still somewhat of a n00b, with just three months of trading under my belt. Please share the wisdom! Keeping my losses tight has never been harder, and it's driving me insane.