Robert, that is funny. At least you got out without getting hurt.
Friday was that day that everyone should have placed pretty good trades. 5 of the stocks I love to trade went down. 4 of the 5 stocks offered excellent trades. The chosen one for me was, LNKD. I was able to ride the stock most of the day. I got out at 14:26. I cannot remember the last time I had such a good profit, but I shut it down after the trade and called it a day!
When you get t a point when you do not trade in fear and can accept small losses, you are well on your way. What happens is, when you suffer a small loss, that internal drive kicks in and gets hungry for finding some explanation for that loss. You typically do not walk away and say, "Well, I got my butt kicked today. Let's see how it goes tomorrow". In the past, I would stop trading real money for a period of time and work on breaking down and understanding my losses. I can live with maybe 1 loss out of 10, but honestly I want to string along about 20 winning trades before a loss. I have done some amazing things in practice. I will not reveal how many consecutive wins I have experienced in practice. It is not that important. It is important to not be content with losses. You do not allow them to consume you and realize they are going to happen, but you cannot become content. If so, you will start settling for more and more losses. This process is how I developed my trading strategy. It changed so many times, but each time, it became more "loss proof". The basic concepts of what I learned in WSB are still the core foundation of my strategy, but I have also gained a ton of knowledge from other sources as well that allowed me to mold an approach that works for me. I have a checklist of what should happen before entering a trade. My checklist is pretty long, but I have learned which components are required to be checked before entry. This takes all the guessing out of trading for me. I do not study the news. I have found that indicators truly reveal the direction the market is going to go. I accept the fact that there are going to be times when something is stated or an unexpected occurrence will take place during the day, and the markets will respond based on that information. If I recently entered the trade, and I am not aware of what is going to take place, I take a small loss because when certain things happen such as a sudden turn in my option price takes place-despite all indicator signaled an entry on my trade, MF goes crazy and starts to show a pattern that I clearly see is a problem, or the DOW and NAS turn and starts to run in the opposite direction within seconds. I quickly jump on the news and get an idea of what is happening. I can usually get out of the trade before the position turns and runs more than 10% loss of position size. Again, these situations happen rarely, but I have accepted that they do happen, and I have to live with the negative results. My goal is to never, ever, ever, lose more than 15% of the funds I used to buy a position. I know that is a bit high, but I am a realist about this as well. If I have placed 15, 20 or 30 consecutive trades and earned an average of 20% per trade at $5000-$7000 a position, I am very happy with that. If I happen to lose 15% of a position, but roll the next 20, I consider those odds to be pretty darn good. I will live life happily ever after with those numbers. Point is, expect, accept and deal with loss. Do not allow an occasional loss to disrupt your trading style., and definitely do not allow an occasional loss make you fearful. If you are trading scared, you will make a lot of mistakes. For me, solid winners in practice removed most of my fear. I am not opposed to placing real money trades on hold for a couple of weeks-until I find out why my trades are not working as well. Once I figure it out, I start back trading with limited to no fear. I have respect for the market, but I am not afraid of it. Reduce the fear, and you have won a very large part of this battle. Do not face your fears when you have real money on the line. Fight that monster in practice. There are no great athletes, musicians, actors/actresses, writers, doctors, lawyers, etc. who have not practiced their butts off to be good at what they do. Guess what! Trading is no different. Show me a trader who is very, very good at trading who has not practiced. If one steps up and says,"I have not practice much, but I trade for a living", My dad would say, " You lying rascal. You are lying between your teeth".
Study hard, trade well.....
