I have been noticing that when I am profitable in my trade I take profits far too early too ensure a paper profit.. I deviate from my original trade plan, Let me explain;
$NAKD I bought this stock just after market close on a dip with the intention that although it was up over 100% on the day it had the volume and the momentum to continue for a second day morning spike... This was my plan buy this small dip after hours expect a gap up and a morning spike... the plan went as expected gaping after hours yet when I woke up the following morning pre-market, I saw my paper profits and was too consumed with giving such a profit back that I sold my position for a healthy profit pre-market . Because of the profit I saw in front of me, I deviated from the plan of waiting for market open and a spike. I LEFT MORE THAN DOUBLE THE POTENTIAL PROFIT on the table because of this..
Similar instance with $JAGX I saw that the stock had put in a double bottom after a morning panic and first bounce that failed but also failed to break the low of the day... I bought the stock just above its low on the day and my trade plan was a stop loss at low of day break and profit taking around its first resistance in the low 1.00's with hopes of breaking hod..
The trade again went in my favor but when i saw it struggle on its first attempt to break first resistance of .96 I took profits. What I should have done is moved my stop loss to break even and let the trade either play out according to my trade plan or break even and move on knowing my plan was wrong... Again the stock sky rocketed through resistance levels went green on the day broke the hod of day and continued for what would have been some where around a 35% profit....
The point of these two examples is that I have well laid out trade plans that once I start to see profits I deviate from with the fear of a winning trade becoming a losing one.. The problem that I failed to notice at first is, that if you only have winning trades with profit that are same dollar amount as your losses are on your losing trades you will never become a profitable trader.. so my new practice for the rest of this month will be to implement the idea that Im only going to trade according to my trading plan.. no rash quick thinking in the trade to save small profits when there is a sudden down tick or no cashing out quickly when it appears to be spiking and this could be the top if it fails.. allow your trade to work for you or be satisfied with a break even or small loss.
my biggest losses far exceed my biggest winners and that's due to not sticking to trade plans. They are far easier to see that you didn't follow a plan with a loss then when you didn't follow the plan with a win and THAT is what Im working on for now
Is anyone else experiencing this in their trading? How are you using your trading plans when trades want to shake you out? what practices do you take to prevent knee jerk reactions to small movements in price action?
@King_Ramza i have the same problem... a much greater tolerence for pain then success.
@King_Ramza "Double Top" caught my eye after your brought this to my attention. I've been noticing since the month started after this bull flag indicator is present that 4/5 stocks I am watching will drop from a minimum of -0.10 cents up to $ -1.00. The chances are even greater if the stock is 2 days old or what I call "no longer fresh". I typically just trade stocks with news. I just wanted to thank you. You also inspired me to try shorting stocks using this concept and learning more by us
using technical indicators and trying to buy HTTM and other books. too bad they are no longer on sale.
HTTM is a comprehensive guide everyone should buy.
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