Loses were small since protective stops were in place so the first couple of winners brought me back positive.
Just a reminder that it's a funny game where anything can happen, no one can control or predict the events. As traders we can only control our reaction to the events and always be prepared to manage the downside potential so as not to get psychologically or fiscally damaged. Using stops and deciding before you get into the trade the point at which the reason for the trade will be proven wrong will protect you.
Confidence and total belief in your yourself and following your trading plan will make you a winner in the end.
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5 comments:
I agree with that statement... so many of my initial trades I found going right back in the other direction. Sucks to lose the cash, but I'm glad that I'm still going through with the trades, knowing that eventually probability will be on my side.
I have to keep reminding myself that if I don't act on every opportunity that says "go" to me, I might as well not get into to any at all.
Seems too often that when I second guess myself and only get into a some stocks, that the ones I got in turn on me, while the ones I passed worked perfectly.
Excellent point that a lot of new traders glance over.
Scott, how do you handle your stop losses? I've never seen you mention it. We all know stops get gunned repeatedly in this market. Your entries are exceptional, but even then I've seen trades probe well past a reasonable level just to gun all stops by an extra .10+cents, then continue the trend. Just a stop gunning "screw you" type of set up. How do you avoid that?
I can see in your charting and trade methodology where you would consider a trade invalid. How do you handle it as a percentage of what's at risk with a hard stop?
Dear Scott,
I found your blog eight weeks ago and have found your advice to be spot on.
Thanks for sharing, your methods really work.
Sincerely,
Jim
Of so great importance is having a well-defined and tested edge/trading plan. One must be entering at points that have been time-tested for high-probability of success. And, just as importantly, one must exit where it is proven to capture much of the gains available from a successful move in order to offset one's losses from unavoidable stop-outs.
I am stating the obvious, but a proven trading plan should be in place prior to risking real money, even if one is faithful with stops. Otherwise, stop-losses will likely drain a trading account before the trading plan develops to where it should be.
The wisdom of your approach in this regard when you started out proves wiser to me with each practice trade I take.
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