karennma
8,057 posts
msg #55746
- Ignore karennma |
10/16/2007 12:25:04 PM
What do you do when you thought you bought the bottom ,,,
but you didn't.
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johnpaulca
12,036 posts
msg #55747
- Ignore johnpaulca |
10/16/2007 1:35:03 PM
sell immediately ...stringent money management is paramount.
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curmudgeon
103 posts
msg #55750
- Ignore curmudgeon |
10/16/2007 1:57:14 PM
I jump up a time frame or two when everything starts heading down. This tit for tat crap over the last few weeks feels toppy.
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karennma
8,057 posts
msg #55754
- Ignore karennma |
10/16/2007 5:12:46 PM
Jumping out as soon as you realize the stock's moving against you is fine, as long as you're trading the stock, ... not options.
On a reversal, one can usually manage to buy back the stock at a price lower than where it was sold.
But a small move in the wrong direction on an option can mean a huge decrease in the bid. So,
If you sell and the stock goes up just a little the next day, you're screwed. (you've lost some of your leverage)
:>(
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jrbikes
624 posts
msg #55760
- Ignore jrbikes |
10/16/2007 10:14:42 PM
sell at the predetermined stop! unless your crying, then you cant see!
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TheRumpledOne
6,411 posts
msg #55762
- Ignore TheRumpledOne |
10/16/2007 11:20:13 PM
EXPLETIVE DELETED!
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betyerbottomdollar
169 posts
msg #55763
- Ignore betyerbottomdollar |
10/16/2007 11:27:04 PM
Stringent money management is important. That is what trading is, fundamentally. But I have been whipsawed out of too many good stocks too soon, so I no longer set a stop loss. Instead, I keep my profit stop at the top bollinger band. It saved my butt on TBSI (doubled in the last six weeks baby!) and if a stock does tank, the bollinger band lags behind and will eventually catch up, nearly always selling for way more than a stop loss would have.
But if you are talkin options...well, can't help you there. Ameritrade STILL won't accept my application for a margin account. Nevermind they make well over a hundred bucks on me per month. Hmmm...speaking of money management...
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karennma
8,057 posts
msg #55767
- Ignore karennma |
10/17/2007 7:30:03 AM
betyerbottomdollar
- Ignore betyerbottomdollar 10/16/2007 11:27:04 PM
Stringent money management is important. That is what trading is, fundamentally. But I have been whipsawed out of too many good stocks too soon,
===================
================
Exactly.
Habitually "cutting your losses" early can lead you down a road of "no returns".
So at the end of the month, you've not really gained anything by selling out of positions "too soon"; you've simply locked in losses and screwed yourself out of profits.
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karennma
8,057 posts
msg #55768
- Ignore karennma |
10/17/2007 7:53:02 AM
Matter of fact, there's a book I've been trying to get called,
"What I learned losing a million dollars" by Jim Paul and Brendan Moynihan.
I can't find the book at a reasaonable price, so I'm thinking of writing about my own nightmare ...
"How I lost a million dollars by cutting my losses".
:>(
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msummer2007
129 posts
msg #55769
- Ignore msummer2007 |
10/17/2007 7:59:30 AM
Karen: You need to define your time frames. If your day trading, and enter a trade at a perceived bottom and the stock goes lower, you should have a mental or visual stop loss in place. Example: Normally I am a swing trader, when I see my position working against me and passes through a key support level, out I go. I am looking at daily prices, so this is my defined time frame. I would never judge a trade that I made on a 5,15 - minute ticker. This would confuse my trading procedure. In a relative way, if you are trading in 5-15 minute time frames you should apply the same exit procedures to that time frame. This will prevent a quick scalp trade from becoming a longer term hold. True, you will get whipsawed
but if you have a system that you employ religiously, your winners will far outweigh the losers. If not, then you need to go back to the drawing board and improve your entry triggers. It is really that simple. There is no mystery to trading, it should be done unemotionally. Take the emotion out of trading and watch how much more disciplined and definitive your trading will be.
Good Luck Bob
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