Please..help w/ risk mgmt!!

S

slickshal

does anyone have any sound advice on money management skills.... i basically scalp listed and i am very successful and finding nice set ups (75% is in the green but the other 25% is where i get spanked...hard)..
Its when the position goes against me and the drawdown begins... i f**kin freeze.

i dont know if its the fear of losing, cant accept defeat, or it could be my high tolerance for risk.. although i am not finacially capable of it.

i know one thing for sure.. because of the erratic swings in hybrid... its happening alot more now..

im hoping someone who had the same problem found a resolution for it. i can use any help offered...

the bottom line is... KICK IT!! once the position move against me, utilize what ever stock im playing off of.. before its to late and the agony begins.

i must say.. this is the single most hardest feat i need to over come.
 
maybe consider putting on a pair against your losing position until you get a better handle of what is happening. Often you don't want to panic and sell just because your stock has fallen as it may pop right back. But at same time you don't want to be frozen. So try shorting a similar stock in a way that makes sense. But this is an advanced strategy and you need to know what you are doing.
 
Quote from silk:

maybe consider putting on a pair against your losing position until you get a better handle of what is happening. Often you don't want to panic and sell just because your stock has fallen as it may pop right back. But at same time you don't want to be frozen. So try shorting a similar stock in a way that makes sense. But this is an advanced strategy and you need to know what you are doing.
More...

when u say pair.. do u mean buy one stock and short another.. please explain. ty

michael
 
you are afraid of facing defeat. You get scared to admit being wrong.

You have 2 choices. #1 = get over it
#2 = go broke

The rest is up to you. What you are facing is nothing new in the trading game. You find some more brass or you will fail. Trading is where you face up to the fact that no one ever wins without losses tossed in the mix. Other professions allow a much more lenient learning curve, but trading learning curve is backward facing, the slower you are in facing hard truths the more it will cosy.

Be brave, be strong, be advised many can get over this most important hump. I guarantee you those that never get over the hump and long gone.
Stick around.
 
silk

horrible advise in telling someone to hedge a loser. WRONG, WRONG..

His problem is facing a loss, not how to make the problem worse. Good GRIEF Charlie Brown!!!!
 
My day trade stop rules:

First make sure you choose a stop price (according to your trading plan) before you enter the trade . Then once you enter a position send an order through for your stop loss right away. Never change the stop price on a trade going against you. The only time a stop price can be adjusted is to trail a winning position and lock in profits.

Swing trade rules are the same and I typically enter my stops as day orders and re-enter them after the first 5-10 mins in the next morning. This is to avoid getting stopped out for no good reason on the opening volatility.



I had the same problem in the beginning where all my loosers became long term investments. But eventually I learned that 75+% of becoming a successful trader is money management. Once you get a handle on this you'll be able to still make money on days when less than half your setups are winners.

cheers!
 
Quote from slickshal:

does anyone have any sound advice on money management skills.... i basically scalp listed and i am very successful and finding nice set ups (75% is in the green but the other 25% is where i get spanked...hard)..
Its when the position goes against me and the drawdown begins... i f**kin freeze.

i dont know if its the fear of losing, cant accept defeat, or it could be my high tolerance for risk.. although i am not finacially capable of it.

i know one thing for sure.. because of the erratic swings in hybrid... its happening alot more now..

im hoping someone who had the same problem found a resolution for it. i can use any help offered...

the bottom line is... KICK IT!! once the position move against me, utilize what ever stock im playing off of.. before its to late and the agony begins.

i must say.. this is the single most hardest feat i need to over come.
More...

I think the obvious question is why don't you set hard stops if you know you tend to watch things go in the crapper?

Let's start there...
 
One other lesson that cost me A LOT of money to learn -
NEVER add to a loosing position. I never double down on loosers hoping to lower cost base, even though once in a while you could get lucky most of the time you end up losing more. And in the mean time you've tied up a bunch of capital that you could be putting towards new opportunities.

I've learned the hard way, as I'm sure most have.
 
Quote from craneman:

My day trade stop rules:

First make sure you choose a stop price (according to your trading plan) before you enter the trade . Then once you enter a position send an order through for your stop loss right away. Never change the stop price on a trade going against you. The only time a stop price can be adjusted is to trail a winning position and lock in profits.
More...

Make it even more bullet-proof: Every single order goes in with a stop attached (OTO = one triggers another). You are never allowed to hold a position without a stop, even for a few seconds. Move stops only toward your target. Or use auto-trailing stops, with or w/o scale-out. Even better, put your target in too -- make every order OTT (one triggers two).

If your broker or front-end platform doesn't have this capability, get one that does.
 
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