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 fear of gibing back

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PostSubject: fear of gibing back   Fri Oct 24, 2008 12:58 am

im sure it has happened to almost everyone here when you buy something, it moves up right away and you sell to grab the money.

then right after it comes down and you were right, other times it just shoots up and you wish you would have held it.

what do you think causes us to do that?
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PostSubject: Re: fear of gibing back   Fri Oct 31, 2008 9:53 pm

Hindsight and the desire to make money. That's what this is all about. Now having said that, if the market wiggles and I have a small profit I'll take it. But if I have a fat profit I give the wiggles more leeway. For example, if I'm up 10 cents on a stock and it shows a dip with the market then I'm gone. If it bounces back I still won't regret it. Many times I have become greedy and let a 10 cent profit become a 50 cent loss (per share). In this market you take what it gives you. But let's say I'm up $1 and the market wiggles then I'm willing to let it slide some unless I see something I don't like.

My cost is 1 cent per share to trade with $1 minimum per trade (after 500 shares I think it drops to 1/2 cent per share). Very good for my trading volume. I need to make 2 cents to break even. So if the market turns I can exit in a hurry and re-enter easily.
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PostSubject: Re: fear of gibing back   Sun Nov 02, 2008 12:05 am

hey paw is your avatar a screenshot of all your donkey kongs? lol

a reason why so many people take profits quickly and let losses keep growing is a sad but funny one. i always say theres an 80/20 rule where either 20% or 80% of your trades work out. the people who only win 20% of the time CAN BE successful traders, but their problem is when those 20% of winners come along, they're so scared that they're going to give it up that they end up taking profits quickly and it doesnt cover enough of the 80% losers.

an example of successful traders who win only 20-30% of the time are breakout traders. they look for stops to breakout or breakdown an jump in. less than 30% of those breaks work in their favor but when they do work, they work big and make up for the 70-80% loss.

unfortunately theres not much to do but try to discipline yourself. i cant exactly slap your hand... when you win only about 20% of the time and they are big but you take profit too quickly, you have to realize that youre now playing an endurance game.

heres a suggestion for you... whatever your stop loss is, try multiplying it by 3 or 4 - use this as your profit target. if youre already losing 80% of the time, i dont think this will hurt you Smile
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PostSubject: Re: fear of gibing back   Sun Nov 02, 2008 9:40 pm

wallstreetsedge wrote:
hey paw is your avatar a screenshot of all your donkey kongs? lol

Donkey kongs to 15 cents. You're lucky you can see the candles on this one. I got one somewhere where you can't see the candles. affraid I don't use this strategy anymore preferring to wait for the setups to align.
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PostSubject: Re: fear of gibing back   Sun Nov 02, 2008 11:20 pm

i think i fall into that category.. i noticed most of my trades DON'T work out but the ones that do work out big. so i pretty much set limits using ATR.
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PostSubject: Re: fear of gibing back   Sun Nov 02, 2008 11:30 pm

if you're talking about longer term trading.. i normally like to use 8% stops for my buys and 4% stops on my shorts

when it comes to swing trading, i will typically raise my stop loss by 1/2 of the daily move. so let's say we bought AAPL at 100 and it moved up 104, id make my stop 102. if AAPL climbed another $8, i would raise my stop by $4

hope this helps
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