I'm new to trading and to this site. While browsing the archives, I saw a good thread about positive realizations. On the flip side, what are some of your most expensive thoughts while trading? (If this should be moved to psychology, just let me know.)
Not sure what you mean...? An expensive thought I had was not placing my stop and leaving for class and coming back to a $4,000 loss (1 hour 15 minutes later). I thought I'd be okay without my stop. That was a pretty expensive thought... No worries, I made it back and learned one of my most valuable lessons yet.
Believing in my trade and being over-confident, instead of letting the price guide me in what should be my systematic approach. lesson learned: If you ever have second thoughts in trading, then do not trade. find your edge...Focus....and do the boring job of execution.
Hopeful thoughts about how a trade will go when it's going against you especially can be very "expensive thoughts". This is called "babysitting" a bad trade. While you're "hoping" your bad trade will get better, you're maybe missing a potential good trade that would have easily gotten you your money back and made more if you had only just taken a small loss and moved on. Instead you feel bad about the money you're down and the longer you refuse to take your loss the potential for the situation to get even worse continues. The trade doesn't care what your yearnings are for it to come back. It's not listening. Plus your money's tied up in a losing position. Hope is not useful in trading and is very harmful and keeps you from focusing on what is actually happening in the market and with your trade and keeps you from acting. Good trading to you.
LOL u want expensive. hahaha going long on a "hunch" when my system said go short. 3 days later as i was peacefully asleep in australia the NASDAQ crashed with me having no stops on. I lost 20% or 10k of account equity that day.