Also in terms of entry types, it depends whether the entry is focused more on probability or profitability and varies from trade to trade. For example, two shorts I took today were UNH and CPRT. Short UNH is a ballsy play because it's been so strong, but it's way overextended and ripe to fall hard. So that's a play where my odds of success are lower BUT I'll get a fatter win if I'm right. Short CPRT was more of a probability play. It's a beaten down, lower priced issue, just the type to get hit in a market like this, more likely to crack but less likely to plummet as much as UNH would in the event of big smackdown. I lean more towards probability based entries than high reward to risk ones- but I like to have fun every once in a while and see if I can catch a sick move on a major bounce or a fall from grace. On balance, both entry approaches work over time. One has more reliable percentage of wins, the other wins less often but gives bigger payouts. It's when a trader switches back and forth too much and doesn't know which style fits him that he burns himself out psychologically and gets the short end of the odds stick. If you stick with a philosophy long enough you will get the bad AND the good, if you mix it up too much or don't know what's best for you, you get the worst of everything you try.
Yes every trader who has learned risk management has gone through his own catharsis regarding the amount of damage a trading account can sustain through seemingly "irrational" (contrary to your position) market moves. Experiences like those force us to get religion fast.
I had the biggest coulda woulda shoulda of my life recently...I was long 25 Dec EDS 60 puts in March - I cashed out for 7K. I left about 100K on the table. nitro :eek: