Still Having Trouble Letting Winners RUn

Discussion in 'Psychology' started by Flashboy, Jul 2, 2008.

  1. This is the #1 problem for traders to turn profitable. There is even a name for it (heuristic risk).

    Short explanation: over 90% of all humans are risk averse when they have money, and risk taking when they don't (the rest are pure gamblers).

    This can be applied to any time frame, even the individual trade level. Think about it. When you are out of the money on a trade, but within your risk area, I bet you always wait to see what happens. But when you get some profit, and the mkt moves against you, bang, book those profits! You can never go broke booking profits right? WRONG, cause then your ave gain is smaller than your ave loss. Unless you are extremely accurate, you will bleed to death.

    No simple answers. I usually book half my profits and let the rest run, but it depends on the trade. I also continuously remind myself that its just a #'s game in the end. Each INDIVIDUAL trade means nothing in the long run. I realize if I don't let em run, in the long run, I am toast.

    Jay
     
    #11     Jul 14, 2008
  2. Hey 4D,

    I wouldn't quite say I'm a profitable trader yet, but it is turning around. I'd like to see 6 months of profitability before I feel comfortable making that statement.

    I've been trading for about 4 - 5 years. Its been a long tough road.
     
    #12     Jul 14, 2008
  3. Can't argue with that.
     
    #13     Jul 14, 2008
  4. NoDoji

    NoDoji

    I've found the trailing stop to be solid way to lock in a profit when you're thinking of exiting, because it still allows profits to run and if the trade turns against you, you take away close to what you planned on. One thing I've found though is that in this downtrending market if a position is moving up sharply in pre-market trading, grab profits as soon as the market opens. I waited just a few minutes this morning to exit my AAPL calls from late Friday and ended up with a gain of $4350 instead of $5350. Can't really complain too much tho :cool:
     
    #14     Jul 14, 2008
  5. Just let them run man:D
     
    #15     Jul 14, 2008
  6. I understand, it's indeed a long and tough road. It's usually longer and tougher than we first thought it was.

    I am glad you are almost there. I am not going to comment on letting the winner run, I am sure you know how to handle it, it just takes a little more time.
     
    #16     Jul 14, 2008
  7. [​IMG]
     
    #17     Jul 14, 2008
  8. This guy wins.
     
    #18     Jul 14, 2008
  9. ER, he says.
     
    #19     Jul 14, 2008
  10. pdbro

    pdbro

    Why doesn't anyone ever mention trust in ones own stock picking? When you have a strategy you trust and a vision of where the stock is going to go from there it is simple. Once you have that if the trade does not do what you thought it would do then axe it. This thread and website is like one big ramble of hopeless trading advice besides some revolutionary ideas that get shot down by all the typical day traders.
     
    #20     Jul 20, 2008