I trade the S&P emini (ES) and have made money on 84% of my trades for the year. I am not a novice in trading. However, I continue to make the same stupid mistake of moving my stop loss order to offset my position whenever the market moves against me. For instance, on Friday I had a 4 point stop loss on my long ES position and it turned into a 16 point loss. I keep hoping, begging, praying the market will reverse and breakeven which it only occasionally does. What do traders do to mentally prevent themselves from making this mistake of moving their stop loss order? Any advice would be appreciated.
I regard entering the market on a short-term trade as like running into a burning building to rescue your life savings. You can come out the way you want to, the way you came in, but you'd better have a Plan B - before you rush in. I only enter the market on orders. I always set a stop-loss attached to the entry order so I know where it will be before the position is even opened. Once in the position, I know why I entered, I understand why I put the stop where I put it and I know that if the stop price is hit, I really really want to be out. And I never move the stop further from entry.
the short answer is it doesn't matter much... stops don't move the needle on your performance.. so do whatever you are comfy with.
Put your stop where it has a good chance that it will reverse, so you would want to be out anyway (and maybe even start looking for an entry in the opposite direction)
I frankly find either the question or the first line of your post to both be ummm less than candid. If 85% of your trades are profitable you must be scalping. If you are scalping 4 ES point is an awfully wide stop let alone 16. Be that as it may you already know you shouldn't be moving your stop. Why do you feel something someone else says will get you to change? Maybe hire a scolding school marm to look over your shoulder. Because moving stops on a regular basis can take you out of the game ... completely.
If they knew where that was they wouldn't have a problem setting a stop in the right spot to begin with and leave it.
Congratulations you are doing well. Whatever you are doing just keep doing it. I suggest you take a more positive attitude toward your trading. you need to keep doing what you are doing. Do not change anything. 84% winners is terrific!
Contact Gamblers Anonymous Discipline cannot be gifted to you on an internet forum. The most common way of acquiring the discipline to follow your trading plan is by having a massive losing trade. That's how I learned it.
It is simple: you have a 'need' to be right. It is your ego. You want to be right a 100% of the time and somehow it bothers you it is only 84%... So you do not want to take the loss because you want to be right. Now it is becomming a bad habit. Your trigger for the habit is starting to lose, then you have a handling of moving your stop, your reward is getting a profitable trade instead of a losing trade, your carving the next time is wanting a winning trade instead of a losing as soon you are seeing your trade is losing. The habit is created. 1) you need to do something completly els : get up and walk away for example. 2) you need to find your need to be right from something else then trading. Are you telling your self you need to make money everyday? Is someone you care about looking at you? These are the most common reason why you want to be right. Changing this is going to need work on your self and how you think.
It sounds to me like this 84% win rate is only because he keeps moving his stop loss. If it wasn't for the big selloff, the market might have reversed and he might have gotten out BE or with a profit, thereby reinforcing this action. The question to ask is what would his win rate be if he always kept to his 4 point stop. Perhaps the win rate drops drastically. We all know that a 90% win rate of 1 point with a 10% chance of a 10 point stop out is not profitable. Something similar might be going on here.