Sold early and feared of riding profit into loss

Discussion in 'Psychology' started by a529612, Jan 24, 2007.

  1. A529;
    As the gentleman said ;
    a]scale out ,
    and you either sell too early or too late

    b72]Bankers like the rule of 72 a variation on that look, at all[all] the data for about 72 hours a week. Record it also, hi/low.....

    c]See, simplify it ,you can sell or close too early ,
    or too late ,only liers sell the top all the time.Closed several positions early today , 7 day long swing trade, yes its still going up LOL:cool:

    7]Usually premarket give myself several targets to hit;
    wrote down 7 this premarket , and it [price]hit all 7 in a short period of time.A very strong trend wouldnt havr hit many or any of them, shallow pullbacks are a trendfollowers delight.

    Discretion will preserve you.
     
    #21     Feb 2, 2007
  2. Indeed. Its easier said said than done. I have had many nasty experiences of being greedy and hoping for a bigger profit but most of them did not end well for me.

    I ended up barely breaking even for those trades, when I could have made 5-7x more if I had sold at the "top".
     
    #22     Feb 4, 2007
  3. I've had similar experiences- moderation and reasonable expectations seem to be best over the longer term (and of course careful entries).
    And I think another thing that Livermore said was that no one went broke by taking profits.
     
    #23     Feb 4, 2007
  4. xxxskier

    xxxskier Guest

    "let your winners ride and cut losers quickly".....always great advice, but the reality is that unless you have insider info or are psychic there is no way to know how long your winner will keep on being a winner.

    the solution to this problem came to me via some advice that my father gave me (he's a retired broker and active trader), what he told me was that for most people (non-insiders) there are really only two ways to exit a stock - you're either too late or too early.

    getting out too late means you let your winner turn into a loser or at least less of a winner; and getting out to early means you left money on the table. my preference, and the prefererence of long-term, consistently profitable traders is to error on the side of getting out too early. yes, its painful to look at a chart and realize that you could of held longer, but to me its even more painful to look at the chart and realize that my greed caused me to hold too long.

    a common problem for struggling traders (i've had this problem myself, but have mostly overcome it now) is that the fear of missing out over-powers the fear of losing money. once you get past this ego problem of 'needing of be right', you will start to make money.

    to make consistent money in the long-term (i.e. a year or longer) you need to sweep profits out of your trading account on a regualr basis, maintaining the approximate same level over time.
     
    #24     Feb 4, 2007