FOMO > Fear of a loss Your stop will probably let you know. What are the exit rules in this case, is this where the 10ma cross comes into play?
Not in this case, for me FOMO makes you enter prematurely, here I'm already in, so it's just letting the trade live its own life until either it succeeds or I judge it's time to close. Yes, either the stop or maybe me judging it's not doing as expected. Yes but my appreciation comes also into play, I mean, for example if I had a series of consecutive losses maybe I will want to catch a 40-50% profit when it's there, opposed to this, if I recently had a series of wins in a row, I could let it run until the 10ma cross, or still if it made a strong push, I could decide to keep it longer having the EMA200 as an absolute stop loss. Here is a chart of Taylor Devices that illustrates it all at once. It looks so good to be true and it is, open it in your charting software to see if you see the same thing. This is the kind of trade I would like to do one day... Read the yellow annotations from left to right...
To my way of looking at price is that the market doesn't know or care where you entered. Deciding to hold a stock is the same as deciding to buy a stock. Nothing wrong with that thinking. An excellent example of why you should hold. The question you have to ask yourself is at what point do you exit if the price continues to move against you. You mentioned selling if the stock doesn't do what is expected. Then there is the fear of being "That Guy" who sells just before the price turns around. You finally get to a point where you rationalize harvesting losses to offset taxable gains as a good thing. I find that the problem with giving a stock room to move is that I tie up my capital and may miss other opportunities. Buying a stock is easy. Selling is where your emotions get tested. I see you as being on the right track but you're leaving yourself open to letting fear and greed affect your decisions.
Of course I asked myself that question and I have clear rules to know when things are not going as expected and that I should close whatever the P/L. FOMO or just contradicting your first statement ? "An excellent example of why you should hold." I give a stock a limited time 2-4 months to do its thing, found that in back tests, in that window I should take what it gives. Agree and by far I don't master everything, will have to learn, make mistakes and take losses, the most important is to follow my plan, protect my capital and be here the next day, to get the next trade trying doing it better.
Yup, I guess it's my FOMO, I don't like to have capital tied up not producing the results I expected. I have found that my best trades work from the start. Usually take off and don't look back. I have lots of examples where the stock took off after I sold it but also lots of cases where the price continued to drop. It seems to work to my advantage to cut losses quickly and take profits at the first sign of a reversal. It may have something to do with my lack of diversifcation. Don't consider losses as mistakes. Consider them business expences. If I follow my plan and have a loss, it's a good trade with a bad outcome. Mistakes are when you let your emotions overide you plan. Even if it turns out to be a profitable trade it's a mistake.
At the end I find similarities in how we think but I lack the experience that you have. I want to get that thing, you know, when you know almost from the start that something is working or not. No, by mistakes I was talking about execution or taking a false signal, stuff like that... I agree that losses are part of the game.
19. ML, MoneyLion Inc. Continuing my paper trading with this new one. It broke a small base in consolidation quite above all the EMAS and with volume above average. Long at 78.90, Stop Loss 10%
20. PUBM, PubMatic Inc. A CAN SLIM Challenger that seems to be building a trend. Giving it a chance and being long at 21.18, Stop Loss 10%
21. GBX, Greenbrier Companies Inc. Last one for today and an interesting one. It didn't beat the expectations on recent Earnings and was punished for that, while remaining fully CAN SLIM compliant ! Is it repeating what it did last October ? Long at 46.72, Stop Loss 10%