I agree with your points and you make some very good ones. However, there is an additional facet to it you haven't mentioned that often lead to such self-destructive behavior. If you do avoid a loss, you feel happy as you are correctly describing, BUT, if you take a loss and the price reverses and you see you could have avoided the loss and/or could have made some additional money - that sucks MUCH MUCH more compared to how happy one would be if he avoided a large loss...
Your reply is very strategy specific. Obviously what he does works well enough in principal. Some strategies are based on preempting the moves. Mine is and his seems to be as well. The moves might not be large enough to wait for the correction to develop b/c you'll be late. Your approach is certainly less risky, but that doesn't mean it's a better one.
neither... it just is part of the game... early stops and missed opportunities. >>The goal is to minimize both, can't eliminate entirely; and then accept that which you cannot perfectly change! Further... one does not " suck more?! IF it feels like it does, as you describe (in capitals), then that is WHY the original poster on this thread (and anyone) is having or will begin to have the problem he described. Unless and until one (each of us) accepts this as an imperfect situation... unless and until one understands (to use a sports performance analogy) that baseball guys are considered real good hitters jacking homers less than one 10th-15th of the time... and singles/ doubles maybe 1/4 more... frustration wil be your (our) vanity plate(s). IMHO I-man
Thanks to all that posted on this thread. I am going to make some changes in my daily trading routine. As for opening a position i will open with a max of 600 shares regardless of how good the trade looks. Further i will not add to this position if it goes up or down (only if i feel i want to uptick or downtick, and if i do it will be 100 shares at a time). Also if i feel trouble or if the position starts to go the wrong way i will cut my loss immediately without hesitation. I will also try to take profits fairly quick unless there is absolutely nothing threatening happening. The end result i feel will be much more consistency but smaller winning days, but thats life. Once my account increases by 10,000 i will increase my opening up to a max of 7 or 800. And if i can continue to make consistent money, i will go to a max of 1000 opening etc... Hopefully this will work for me. Once again thanks again everyone for all the info
One more quick question? When you guys talk about putting in stop losses are you talking about actually placing the order once you open your trade or are you talking about mental stop losses? i have been under the impression that if i place a stop loss in the books, if the price gets near the specialist will be tempted to try to bring the price down that extra little bit to stop me out (especially if its a stop loss at the market order). So are you guys saying to actually place the order or are you saying if the price gets there to just physically sell at that time without question?
If the position is going your way, using proper risk management, don't hesitate to size into the position, even with an extra 100 shares. That's how you make good money. But never size into positions if it stalls or goes against you, That's how you lose your shirt.
Hitnruntrader, lescor recommended to you the book "Trading in the Zone" by Mark Douglas. http://www.invest-store.com/cgi-bin/elitetrader-bin/redir.cgi?moreinfo.cgi?item=11661 I second his recommendation strongly. In fact I was going to suggest this very book to you myself as soon as I read your initial post. One of the best books on trading out there. Mark gave the keynote speech a couple of years ago at the Money Show trading seminars in Las Vegas on just this topic. We make the assumption before we enter a trade that we are right and then are stuck with that perception and become lost if the trade goes against us. Kind of like, "Wait a minute, this can't be happening. Didn't the market realize I had called this trade the other way?" Ha. You have to be able to accept losses in trading. That's just part of the program, part of the reality of trading. If you can't take a loss you'll never, ever be successful as a trader. Tony Oz has a very good attitude in regard to this. Trading is about first and foremost protecting your capital. Great traders all agree that focusing on minimizing loss is far more important than focusing on how much you win. Good luck to you. We're all learning, mostly about ourselves, and there is so much to learn.