Over time I've learned not to be impulsive. Every trade I make is carefully thought out. Where I have problems is knowing when to take a trade off the table...I dont mean a loss or gain necessarily, but any trade that isn't going as expected. I've learned not to let emotions get to me, at least most the time, so sometimes selling, and not realizing as much profit as I could have can be hard. Do you hold on, and remain confidant, possibly making 0.00 on a trade, or do you sell out early breaking the rules of the trade that you set for yourself? Thanks Kon
The Problem is every trade IS NOT THOUGHT OUT, cause if it was, you would know before placing the trade where your protective stop should be, how far Price must travel for you to move your Protective stop to a breakeven stop, how long to stay in trade if Price goes sideways after entry, when to move trailing stops for profitable trades and when to get out of a Profitable trade. The Entry is 10% of a trading method and money management of the trade is the other 90%. A GOOD entry price reduces risk and that is it. The only thing you can control in your trading most of the time is risk. So if the only part you have thought out is the entry, you have a very long way to go. Make yourself a checklist of every problem you think you might encounter, and before putting on a trade, make sure you have crossed off all of them.
1) The impulsivity you refer to may actually be intuition based on experience, something that may be difficult to act on 'logically". 2) You may not be psychologically compatible with your strategy. You may have to alter the strategy to your comfort level, not the other way around. 3) Try to tell yourself that losses are "expenses", not "losses". They occur in any business. 4) Try to tell yourself that taking small profits or small losses is always better that a large loss that arises from ignoring a signal or "feeling".
The impulsivity you refer to may actually be intuition based on experience, something that may be difficult to act on 'logically". ------------------------------- Since we're in the psy forum: fwiw, the book "Blink" covers that subject very well, secondly, the book "Fear of Greed" covers the subject of "gut" instinct. Tough to win an arguement or promote a cause based on intuition and gut but it does have a place making money.
"draw the line between these two emotions" which two emotions? why did people respond to you without knowing what "two emotions" you referred to?
Am i right in saying that the problem is not (or rarely) emotional,but one of a technical nature 'not going as expected'.?If so it can only be answered in 2 areas.Experience/screen time/instinct or trading rules based.How you solve this depends on how discretionary a trader you are or how technical a trader you are.I tend to believe that to be above average, you need to have a good instinct that tells you to get in/out regardless of how mechanical/technical your strategy is.All this depends on what you are comfortable with and it's hard to believe for me that there is a definitive answer here.This may be part of the reason why we never stop learning... Personally,if a trade is not going as expected,i err on the side of getting out with a profit and re evaluating the situation and absolutely in the case of a trade under water.
What you're asking for is The Holy Grail really.. That's why trading is so difficult, nobody can tell you when to exit your trade. Its just something you'll have to work out over time and will be a function of whatever system/method you're using.
Step 1: Write down a COMPLETE trading plan. Entries. Exits. Stops. Money management., etc. Step 2: Follow your plan to the letter. Step 3: Learn from your mistakes. Update your plan. Step 4: Follow your new plan to the letter. Wash. Rinse. Repeat.