This week I had 4 1/2 winning trades and 1 1/2 losing trades.. Let me clarify that the "1/2" was exactly that I sold half my position for a profit and held the second for a decent loss... That's what I want to touch on for this blog.

 

I bought the ticker $CIDM for the morning spike and since I had been talking about in my previous blog about sticking to trade plans I wasn't just going to take the quick morning spike for a profit and be done with stock when what I thought is it had the potential to run all day... Which is were I was wrong..

 

I took off half my position above the 2$ mark for a profit, but what I think this did to me mentally is it now gave me a new entry price.. Now in my head anything below this line was a loss since I could have just sold the entire position at that price for a profit or anything above it was now a new high and maybe I should have held the entire position. I did not realize the mind game that selling half of my position would play on me, especially on the losing side. I have done this a few times in the past and have always closed out the second half of my position for a profit. (lucky me)

 

This time however, once the trade started to go against me instead of sticking to my risk levels from the original buy I was already thinking I'm in the red as soon as it dropped beneath the first selling price.  Now I was still profitable on the entire trade but too stubborn to sell the second half of the position for less than what I had sold the first half for.  this is where I stopped looking at the big picture of this chart seeing that it was making lower highs and was certainly not going to continue to run...

Inevitably I not only ended up with a loss I ended up with a big loss because I didn't even want to take a loss at all since I had been Right in the first place where I sold the profitable part of my position. the rest of the day I played mind games about selling the losing half for break even with the winning half so at least the trade was a wash and this never happened as it slowing faded all day and the end result was a near triple the loss of the gain and a terrible trade.

I don't think I'm capable of using this practice of selling half positions in a trade any longer since the affect it has on me creating a pnl line on the chart..

Do you use this method of selling half position size sales in your long trades? if so how do you deal with situation I explained when your first sell now becomes the high point of the price action and your second sell will inevitably be lower...  what are your thoughts?