Tuesday, February 2, 2010

NEVER LET A WINNING TRADE TURN INTO A LOSER



This is why i raise stops in profitable stocks ALL THE TIME! Look at MAC(A trade we entered today), we entered on a breakout, and rode the stock higher, RAISED STOP TO slightly above breakeven and obeyed the stop! You stop out and the closed is closed, NO IFs ANDs or BUTs! Trade closed, story closed, NO EMOTIONS. This is a choppy rally and we are lucky to have entered a decent trade to begin with. I would not push your luck today with too many trades. Wait, till tomorrow and you will get better trading plays.

IMPORTANT LESSON : Never ever let a winning trade turn into a loser. EVER! If you followed me exactly with MAC, then congrats, you did great! You could exited early and made some money but if you obeyed the exact rules, then you traded with discipline and in the long run, this will bring you good results!

5 comments:

Blue said...

Stweie, this is the #1 thing I've learned from you. Once my trade starts working I always put in a stop to cover my costs. It is typical in this market to get stopped out early all the time.

I've noticed clean setups get preyed upon all the time. We get slow, low volume action and a slow pull back in trend, then you get a quick massive impulse move against the trend. Typically we have choppy action with no trend and one quick impulse which doesn't follow through. These stop gunning exercises have become routine. It has made intra-day trading very difficult. I would not want to be on the wrong side of the impulse move because if you don't have a stop and you decide to hold, it could take days before you get back to break even tying up your capital and your emotional state.

You have to be machine like to day trade this market. If you get stopped out and love the set up and how the stock plays, you just have to keep at it taking those incremental gains until you catch the impulse move in the right direction. It is tedious, tiring, and I burned out from it.

Stewie said...

have you thought about about only trading the open or the close? i notice most of my best trades come near the open or the close. You need to able to make quick executive decisions tho.

Anonymous said...

Stewie,
is your performance on your other site current?

Blue said...

It's interesting how the market can get hot or cold at different times of day in different stages of the market. Indeed, the best action has been the first hour for over a month now. I've slept though most of it being on the west coast like you.

Stewie said...

hi anon:

The performance on artoftrading.net is indeed current. email me if you want the detailed performance sheets. traderstewie@yahoo.com

cheers.

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