I just finally created rules to my trading plan. Now I have a stop and a target in the market. After hearing it many times at seminars and seeing it in many books, I finally did it after losing a lot of money. Amazingly it has changed to way I think about trading. Trading now is not about managing my trade, but about finding a good trade setup. Before, I would constantly check the status of my trade (I am a swing trader, in trades for several days) because I didn't have a stop so I was worried that something crazy would happen and I would lose a lot. Now though it just dawned on me that I don't have to check on them any more. I can focus only on finding good trade opportunities. Has anyone else had this realization? How has it worked out for you?
would you list your rules and share us? my rules are Jessise Livemores's, I am a fan. and I am very successful.
You still have a risk to make a mistake,due to your old habits.It is not about the rules,but about habits...
I am sorry, but I find this funny to me, it is the difference of someone who is just starting out and one who been trading 34 years. The smallest part of the trade to me is the setup and the other 99% of the trade is managing the trade. There are so many times where you have a target, but the price patterns are SCREAMING for me to get out earlier. The entry is a no brainer, have set rules for that, providing price action says go ahead. And yes, there are times where a retracement happens, but Price Action might show it is a very high risk trade to take. Perhaps Price showing Head/Shoulders setting up or double/triple tops forming, maybe a climatic bar is forming after long run up, all would make me unable to take a signal. And all these price action patterns would also tell me to get out faster than only going for my target.
The hardest part for me was learning the correct setup and not revenge trading. I always use a stop and target. I might manage a little the trade if I decided to watch it. This was a good week. 1 day BE, 4 days all winning trades.
the first improvement was eliminating the target. It's amazing how far and how strong some of these things can trend. But what really put me over the top was eliminating the stop. If I wanted it then way back up there, I want even more way down here.
I never use a stop. And never have a target. The market is constantly moving like an ocean. New waves of small medium and large sizes are always knocking your trade around. Usually you can't see these waves until they are close to you. You have to constantly be changing your target based on what you see. A stop in a vacuum is just giving money away to the market IMHO. You have to look at the situation and figure out why your trade went against you an constantly be reassessing.
yeah, same here. They say 90% lose. I think it's because they all read the same book which told them they should have a stop and a target. Good Lord have mercy. I'd be about even now if I took my targets. You just never know when something is going to trend harder and longer than anybody expected. But you also have to protect yourself on the other side in case one of your losses tries to do that to you. Wouldn't it be nice if there was just a formula that could always turn the market into your own personal ATM? otherwise, the biggest mistake new traders make is cutting their profits short and that is why I don't like targets