Leaving Money On The Table

Discussion in 'Trading' started by DraXon, Mar 10, 2002.

  1. DraXon


    By Larry Pesavento,

    Article Posted On Mar-7-02 8:51

    In Mark Douglas’ classic book, “Trading in the Zone”, one of the
    four primary fears of trading is leaving money on the table. It
    happens every time we trade with the only exception being that
    rare occurrence when you happen to get filled on the exact high
    and low! Leaving money on the table is as natural as breathing.
    Just like taking a loss is natural. The accomplished trader will
    forget the last trade faster than a speeding bullet. Trading is
    about probabilities and risk control. Leaving money on the table
    does not enter the equation.

    Many traders, especially neophytes, have a tendency to engage
    in self-deprecation. Extracting money from the markets is a
    difficult task without the added burden of excessive baggage
    brought to the table for a pity party. Be kind to your self at all
    times. You must be your own best friend and constantly remind
    yourself to do the right thing. Always trading and protecting your
    capital is your source for profits. Trading is a journey not a
    destination so trade on, trade on, trade on!
  2. Babak


    thanks for the repost, I was talking to an old trader a few weeks ago and he told me that stocks are like fish, you cut off the ends and just eat the middle. Don´t try to eat the whole thing!
  3. When you read the Market Wizards books or books by some of them such as Pit Bull, you have to notice the tension between letting profits run and ringing the cash register. Traders have made big money using both approaches. I think it largely comes down to your personality. Are you comfortabvle sitting with unrealized profits? If not, you're better off ringing the cash register early--ca-chingo baby--because you will probably bail at the worst possible time on a pullback. If you can sit tight with a trade, learn to do it because you likely will not be prepared to reenter at a higher price.
  4. Magna

    Magna Administrator

    One of the best quotes on this subject was by our very own Qwiktrade when he said:

    "If you exit when your system says to exit, then you didn't leave any money on the table..."
  5. I never seem to hear Mark Douglas's book 'The Disciplined Trader' discussed or recommended. I take it 'Trading in the Zone' is a latter superior work?
  6. Dearest Brother Magna,

    It is with great pleasure and agreement that I perused your above message. I agree fully with your quote of our esteemed brother, Qwiktrade.

    With fraternal feelings of love, comradeship and bliss,
  7. Nice post, DraXon.

    Especially the second alinea.

    Let me tell you what happened to me today, and before once and a while; Normally I am doing a pretty good job trading, but.. then something happens which makes me lose my confidence, or my right state of mind, and I start losing a lot of money fast, it seems almost on purpose! and I don't even care!

    I think one must accept that not every day is going to be a golden day, and be happy with what you can get. The problem stated above is what is holding me back the most currently.

    Good luck to all,

  8. When the ducks quack, its time to feed them.
  9. Bachelier

    I can relate to what your saying. I've been going through the same thing for a couple of days. Four winning weeks in a row then "pow" and you take one on the chin. You get mad, make a couple of stupid trades, digging yourself farther in the hole. Its hard to get back in the groove. I havent come up with an answer for it yet. The episodes have been getting shorter over time so, hopefully, we'll grow out of it.
  10. 'One of the most helpful things that anybody can learn is to give up trying to catch the last eighth- or the first. These two are the most expensive eighths in the world. They have cost stock traders, in aggregate, enough millions of dollars to build a concrete highway across the continent.'

    from Reminiscences of a Stock Operator
    #10     Mar 12, 2002