It's impossible to give you a number without knowing your system and what percent of wins you experience. If you manage to win more times than you lose then a 1 to 1 win/loss ratio is acceptable. You can risk 25 cents to make 25 cents if you win most of the time. However if you only win 1/2 the time then you should use 2 or 3 to 1. Risk 10 cents to make 25. It will be clear at the end of the year when you file your taxes whether you were doing the right thing.
if you are absolutely sure that you can make it back then the loss won't give you such a hard time any more. But if you are not sure then you get another problem.
Quote from ksonsinc: Well i try to scalp for 0.10 cents to 0.15 cents in stock like qqqq msft intc csco dell spy In stock like aapl klac ebay amzn yhoo i try to look like 0.15 to 0.25 At these rates what kind od a stop loss should i expect Advice is greatly appreciated -------------------------------------------------------------------------------- You said you're trading 100 to 150 shares and looking for .10 to .15. With fees etc. Each of your trades are looses even if you make the .15 cents Unless you are trading with no fees. What broker do you use. Your Bio states you registered here in Aug of 05 so you have a few month experience if that is near the start of your trading. Why are you limiting yourself to so few shares while daytrading? don
ksoninc, I know exactly what you mean. I got into trading Retail Spot Forex and identified correlations. I now trade completely different now. The world of Hedging and balance has helped me to overcome the ebbs and the flows of the trading experience. Strategy has become primary and direction has become secondary. Now when I get an ebb...I make adjustments to the basket and may take on a hedge...or take off some exposure...But I am always in...The flow give me many small targets (take profits)along its journey. There are some other details to my "alway in" methodology such as positive interest differentials, but I trade too! Only 25% of my profits are derived from interest earned! I make 2-5% a month in total and never have used more than 4:1 leverage in Cash & Carry (grid). And guess, what...all this can be achieved without ever seeing more than an 8% drawdown... I trade fearlessly and methodically now and can take whatever the market gives me...Its the reaction to the "now" with the peppering of adjustments to keep you in the game long enough to realize some profit... Using both long and short term positions to level your playing field and to adopt averaging and pyramiding into your strategy, helps to bring in the average too... Don't give up ksonic...adjust your horizon to help manage your emotions. That baseline in your brain, needs the nerve impulses from you inner-ear cranial nerve, to to smooth out the rough edges...you are on your way! Good trading to you.. Michael B.
Don i can trade lot of 1000 shares but i want to start it small i have 200K buying power but i use only 50K and try to be patience and discipline. Yes i am always waiting for an opp where i know that i can use 1000 shares but you know the market no one can predict it I have ben hurt playing with 1000 lot when i play with 200 to 300 to 100 shares i come out with a winner $100 net $150 net So i would still play small and try new strategy or idea The main purpose is taking a loss which really mess my mind out but i have to learn and take it i just want to know Et trader what do they do if they were in a situation like me take :- ? Advice is greatly appreciated
Your head is messed up because you can't let go of pride. Let it go. Become humbled. Trust your system. If you are afraid of taking losses, then you have issues with being wrong, which is related to being prideful, or you don't trust your system, because if you trusted your system, then you'd know you'd come out ahead (assuming your system was profitable over the testing sample). Let go of the emotions and just react.
Hello: Its a matter of mastering your thought process. If you have an edge, then you should welcome losses. WHY? Because a loss means that you are one step closer to the next winner or series of winners. If you have no edge, it is hard to be self possessed and to trade with confidence. If that is the case, generally a losing trade is just one of many that you are experiencing while you struggle to find an edge. Unfortunately if you are trading that way, you are (or you become) a "loser". I can understand why you would have a hard time accepting a loss. I believe that there is a part of us that knows that something is wrong and the bad feeling is our subconcious urging us to stop trading. By the way, trading small doesn't work. The reason it doesn't work is that (again) there is a part of us that can't be fooled into thinking "its okay, I am only losing a few dollars"....On some level we know whether we have something or whether we are just flailing around out there. Good luck, Steve
Have a read of "The Psychology of Risk: Mastering Market Uncertainty", by Ari Kiev... it will change the way you think about risk and losses...
Losses? Bloody horrible things if a trader doesn't handle them correctly. There's so much temptation on the markets, especially if a trader is new to it all, or not so new to it all, but, that's money for you. When it comes down to the the psychology of trading and the multitude of books that have been written about the subject, people read how the mind should and should not work, great! Don't beat yourself up! Don't lose faith! Keep going! Losses pay for experience! Further reading: Flattened Your First Account? Mike Hunt. Where The Hell Is My Wife? C. Ulator. It's Only Money! Jonny Cash. And the best seller..... Rags To Riches And Vice Versa. Dr. Terry Bull and Chris P. Bacon.
Next time you don't take the loss when you should, stick your hand on a hot burner. Or give yourself 100 paper cuts on your forehead. I guarantee you that you will be more eager to stop yourself out next time.