You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
an amateur trading mistake
- Thread starter Warrior4g
- Start date
Depends on whether it's a server side stop or not. I don't place stop orders until the position actually reaches my stop. The key with market makers is that they see the orders and size coming through, so they know mentally where the stops should be. They test the areas back and forth until they find the stops and then they run them and make free money.
Quote from RiceRocket:
Depends on whether it's a server side stop or not. I don't place stop orders until the position actually reaches my stop. The key with market makers is that they see the orders and size coming through, so they know mentally where the stops should be. They test the areas back and forth until they find the stops and then they run them and make free money.
RiceRocket or anyone else-
Can you expand on this (server side stop) and if it even matters if someone is trading small size (100-200 shares) on a relatively liquid stock?
thanks
Quote from enforcer99:
was having a conversation about some of the bad habits traders have and decided to post one that really stood out.
when a trader loses lets say 800 on a given day,he will go into the next trading day with one thing in mind:try and get that 800 back as soon as possible. that will just create a disaster. first off,try not to take a big hit but if you do,tomorrow is a brand new day so forget about the previous day or else you will wind up spending the next month trying to get even. if i take a hit and the next day i can only make 200,i leave it like that and don't attempt to push the envelope.if the set ups are'nt there,they're not going to magically appear just because ypu have to make back 800 bucks.
This is probably also known as "revenge trades". Some traders will inevitably make bad trades because they get over eager in their attempt to "recoup" what they have lost, just like gamblers do. It can be a loss earlier in the day, the day before, or a loss just minutes ago.
The setup/opportunity is either there or it isnt, rushing it will just result in more losses.
Quote from enforcer99:
its almost "revenge trading". a trader can become irrational and become fixated on a loss. does'nt matter if its 800 or 8,000, the same thing still happens as a trader wants his money back as soon as possible.
i actually have a list of rules hanging in front of my computer that i will never deviate from. revenge trading is one of them. holding a losing trade overnight is another one. i always said an investment is basically a daytrade that went bad.
Yea, its almost like revenge trading, been there done that lol.
Quote from enforcer99:
was having a conversation about some of the bad habits traders have and decided to post one that really stood out.
when a trader loses lets say 800 on a given day,he will go into the next trading day with one thing in mind:try and get that 800 back as soon as possible. that will just create a disaster. first off,try not to take a big hit but if you do,tomorrow is a brand new day so forget about the previous day or else you will wind up spending the next month trying to get even. if i take a hit and the next day i can only make 200,i leave it like that and don't attempt to push the envelope.if the set ups are'nt there,they're not going to magically appear just because ypu have to make back 800 bucks.
I was experiecning some of this yesterday:
There appears to be a continual loop or a downward spiral -
The more you are invested in something the more you will neglect to follow your system. And the more you dont follow your system the more you will be invested in something.
So if XYZ goes against you and you're really invested in it. You of course want to either
1. not lose as much money as you are currently.
2. at least break even and tell yourself you will follow your system from now on (ya right).
3. the thing will come back and youll make money like you oringally did.
So whats the moral of the story?
Decide why you are trading; if you want inner peace then by doing the above wont help you achieve this; you will be in chaos with yourself. Find a way to center your mind and return to inner peace when you trade.
If that is setting a stop and sticking to it - then so be it.