Fear of loss of profit

D

Dantheman

AGGGGH

Please someone learn from my mistakes :)

shorted QLGC yesterday @ 35.62 because based on the day and the day before's price action ....seemed to me to imply imminent support break. This was an overnight hold and I don't usually do them but I felt VERY confident about the trade (experience has taught me when I'm feeling very confident about a trade call to be more aggressive.)

(long story short) My target was 34.62, but I exited @ 35.20 and 34.95.......had I waited with a simple trailing stop I could have gotten out easily at 33.00 AAHHAHAHAHAHAHAH

The fear of loss of profit in my mind is what keeps a break even trader from becoming a profitable trader (which is apparently my situation.) not net losing but not net winning.


Moral of the story: If you have an edge (no matter what it is), be risky with your profits always because you don't have any idea when your profitable trades will become enormously profitable trades....and those enormously profitable trades will overcome the losses and still leave you with net profit.
 
Quote from hermit_trader:



There are so many chances pop up every day, why bother with just one trade?
More...

Because every new entry entails a new risk of loss. If you're already in a profitable trade, why not stick with it?

Bailing out of a profitable trade for no reason is not a tactic, it's an emotional problem. He's right to be looking for the reason.

--Db
 
Quote from dbphoenix:



Because every new entry entails a new risk of loss. If you're already in a profitable trade, why not stick with it?

Bailing out of a profitable trade for no reason is not a tactic, it's an emotional problem. He's right to be looking for the reason.

--Db
More...

True. But that's the hard part. 'A Reason" implies you can accurately measure the length of the move. Being right about direction is considerably easier than being right about the magnitude of the move.

So, if you're up a 1/2 point, do you want to 'risk' that to make another 1/2 or 3/4 ? You may find that you are giving up your profits that way. Most remember the trades that keep going, and think the good sells were obvious and without doubt (after the fact).

That said, compulsive profit taking is a mistake and should be dealt with.
 
Quote from Dantheman:



Moral of the story: If you have an edge (no matter what it is), be risky with your profits always because you don't have any idea when your profitable trades will become enormously profitable trades....and those enormously profitable trades will overcome the losses and still leave you with net profit.
More...

This contention totally depends on your trading methodology... if you are scalping for a target which equates to your risk, that's one thing... if you are swinging a position (either intraday or interday), thats another issue...
 
Based on you covering price levels it sounds like the trade went against you before it was profitable. Maybe that is the source of your consternation. Yes ?
 
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