Taking profit way too early!?

Discussion in 'Psychology' started by sjain100, Apr 29, 2022.

  1. Hello sjain100,

    Great question

    I am not a consistent profitable trader for more than 1 year, so I can not help you.

    Thank you,
    #11     Apr 29, 2022
    taowave and sjain100 like this.
  2. Many fellow traders have this issue and and it is 1 of 10 psychological faults we have (https://listverse.com/2010/01/07/top-10-common-faults-in-human-thought/), #3 is hyperbolic discounting = the tendency for people to prefer a smaller, immediate payoff over a larger, delayed payoff. It is all about delay.
    Your issues are well documented.
    #12     Apr 29, 2022
    sjain100 likes this.
  3. stepan7


    “And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early, bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine—that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.”

    Excerpt From
    Reminiscences Of A Stock Operator
    Edwin Lefevre
    #13     Apr 29, 2022
    sjain100, SimpleMeLike and Gambitman like this.
  4. Gambitman


    Came here to post this. Hard to sit tight and be right.
    #14     Apr 29, 2022
    sjain100 likes this.
  5. Hello stepan7,

    I disagree with this statement from Reminiscences Of A Stock Operator book.

    If all a trader had to do was to enter the trade and sit tight, we all be rich right?
    Last edited: Apr 30, 2022
    #15     Apr 30, 2022
  6. schizo


    A good setup/rule would involve both entry and exit. You should only get out when the exit condition has been met, eg. either when the profit target is hit or you get stopped out.

    Personally, I think this is a terrible strategy. Your goal should always be to strive to improve your entry. Taking partial profit already tells me that you were never comfortable with your entry.
    #16     Apr 30, 2022
    sjain100 and SimpleMeLike like this.
  7. sjain100


    Yes, going to make it a rule to use a bracket enter before entry. thx
    #17     Apr 30, 2022
    easymon1 likes this.
  8. sjain100


    That's what I think too, improving entry (waiting patiently for a good setup) is very important as well and probability of stop being hit may be less.
    #18     Apr 30, 2022
  9. sjain100


    Thx for the link
    #19     Apr 30, 2022
  10. sjain100


    Must delay the payoff and see how that works out!
    #20     Apr 30, 2022