trading rule one: never think about stop loss. very critical.
find the right vechicles which do not need stop loss.
if you do not use margin, then you do not need stop loss at all. no one will force you out. let the market corrects, if you are wrong, do not panic, hang on, wait a good spot to cut loss, think it as another trade ignore where you get in.
never average in, average down. averaging down is the worst strategy to bail you out. 90% time if you are patient enough, it works. but if you are not lucky, you are in 10%, then you lose big. I choose to wait, treat it as another trade, or as an indicator, if I see my position red for a period, I will think in opposite way, find what kind of setup there.
for example, if I bought something yerstoday, but today it gapped down, first I tell myself, ok, I am wrong, so what? so I will look through what things make this gapdown, after I figured it out, then I look at the chart, if it gapped down to let's say from $50 to $30, then in the opening, it dropped further to 23 something, then stopped, I will mark 23 as a bottom, then I keep watching, when it bounced to 27, it stopped, it started to go down, I mark 27 as top and got out of my holding. of course it is not so simple, since the market is up/down in bars.
or based on the infor I gained, I may put a mental stop at 23. if it never falls back, I trail mentally until the market refuse to bounce and I am out.
the first thing is Never panic when you have a loser. do not use stop loss at intra-day chart, there is no sense at all. stop loss should be always at critical price level. like those daily chart major support/resistance/ 50days/200days EMA price.
intra-day charts are just noises. my point is you should focus on trading idea whether technically or fundementally, and 99% time on those two.
stop loss is just "in case" strategy. my rule is I will do my best to avoid puttinf myself in the place of I am wrong and need cut loss situation in the first place.
trading idea is the key, put a stop loss, recognize a chart pattern always is after-fact thing, not help you profit at all. from the chart you just see the past, the past is not useful at all. and the past can not predict the future.
the reason most guys use stop loss, I think they are lazy. they just gamble. hope luck, that is why they lose. the market has so many combinations. my secret to trading success is I am able to think ahead, use my trading idea to think, see those unprintted charts, of course I am a little bold, willing to risk on my ideas. but not risk on other people's ideas.
my suggestion is: do not day trade. study and prepare and plan each trade carfully, do your best to avoid put yourself in the situation of "cut loss" in teh fifrst place. then execute your trade on daily chart.
in day trading, frequently stopped out, you will have huge psycholgical damage, that will drive you into negative mode. the more trades you make, the more chance you will get hurt. we human being are hard to recover from getting hurt.
so from the start, try to avoid gettig hurt. the better mentally positive, the better your trading.
good luck
find the right vechicles which do not need stop loss.
if you do not use margin, then you do not need stop loss at all. no one will force you out. let the market corrects, if you are wrong, do not panic, hang on, wait a good spot to cut loss, think it as another trade ignore where you get in.
never average in, average down. averaging down is the worst strategy to bail you out. 90% time if you are patient enough, it works. but if you are not lucky, you are in 10%, then you lose big. I choose to wait, treat it as another trade, or as an indicator, if I see my position red for a period, I will think in opposite way, find what kind of setup there.
for example, if I bought something yerstoday, but today it gapped down, first I tell myself, ok, I am wrong, so what? so I will look through what things make this gapdown, after I figured it out, then I look at the chart, if it gapped down to let's say from $50 to $30, then in the opening, it dropped further to 23 something, then stopped, I will mark 23 as a bottom, then I keep watching, when it bounced to 27, it stopped, it started to go down, I mark 27 as top and got out of my holding. of course it is not so simple, since the market is up/down in bars.
or based on the infor I gained, I may put a mental stop at 23. if it never falls back, I trail mentally until the market refuse to bounce and I am out.
the first thing is Never panic when you have a loser. do not use stop loss at intra-day chart, there is no sense at all. stop loss should be always at critical price level. like those daily chart major support/resistance/ 50days/200days EMA price.
intra-day charts are just noises. my point is you should focus on trading idea whether technically or fundementally, and 99% time on those two.
stop loss is just "in case" strategy. my rule is I will do my best to avoid puttinf myself in the place of I am wrong and need cut loss situation in the first place.
trading idea is the key, put a stop loss, recognize a chart pattern always is after-fact thing, not help you profit at all. from the chart you just see the past, the past is not useful at all. and the past can not predict the future.
the reason most guys use stop loss, I think they are lazy. they just gamble. hope luck, that is why they lose. the market has so many combinations. my secret to trading success is I am able to think ahead, use my trading idea to think, see those unprintted charts, of course I am a little bold, willing to risk on my ideas. but not risk on other people's ideas.
my suggestion is: do not day trade. study and prepare and plan each trade carfully, do your best to avoid put yourself in the situation of "cut loss" in teh fifrst place. then execute your trade on daily chart.
in day trading, frequently stopped out, you will have huge psycholgical damage, that will drive you into negative mode. the more trades you make, the more chance you will get hurt. we human being are hard to recover from getting hurt.
so from the start, try to avoid gettig hurt. the better mentally positive, the better your trading.
good luck