So something I have been doing right is sticking to tight stops these week. It is also something that I did wrong...

I see back in my trading that it sucks when you take a 5 percent loss...it always sucks to lose...that is with anything in life. 

But I see that when I stuck to a nice 5 percent or 7 percent stop...instead of trying to average down and add to a losing position, just clear yourself of the position. This clearing enables you to only lose on a smaller portion of your account, and it gives you a clean slate by which you can come at the stock or a different stock from a different angle. 

 

There were times this week when I did it right. I cleared my position by a nice 5 percent stop and ended up making back the loses as I saw a new opportunity in that same stock later in the same trading day. I either recouped my loses, made a little profit, or still had a small loss. But I didn't take any big loses with that technique of trading. 

It is a great rule to have to watch your initial position size, then average down once with the same position size and then exit at a nice tight stop if the trade is still going against you. You could also just exit the trade without averaging down. Sometimes averaging down just makes the loses bigger. We don't always need to grapple for the trade to hold onto to every thread that this trade will work and we will win. We can just let go. I am going to work on doing a lot less grappling this coming week.

 

Both times I could have averaged down with my entire account. But I am glad that I didn't. I am glad that I felt the sting of thinking that I still have the entire rest of my account and grappling (denying the truth of the percent of loses I enabled myself to sink to), and then cutting it instead of trying to grapple with it. It is bad practice to put your entire account into a trade (should be no more than 20 percent to no more than 25 percent ideally).  So I am trying to train myself to just cut than to keep averaging down. So when I have a more decent account size I am not making these kind of mistakes with a larger account. Cutting quite simply clears me of that pos. I can always use the rest of my capital to go back in with a new pos that I am really excited about having. 

 

I must remember that in trading losing is truly winning. We must learn to be great losers in order to be great winners.

 

I did it right and I did it wrong. And I truly see how doing it right is what will help my personal account stock see an upwards trend.