Why new traders sell at the worst time?(trading in the zone)

[murray t turtle]

Once you let emotions rule you, you are toast. A friend of mine who I share my trades with, she panicked and sold two profitable trades (put options) and ended up with teeny tiny profits in the process. The stocks were trending down and she flat out panicked because the stockmarket was going down? Trend on both stocks was down and she had put options, both trades going her way. She just panicked. I am still sitting on those two trades. Not going anywhere. Too bad she wasted it.

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BUT even she did not ''sell @ the worst time'' She made a small profit.
AS far as new traders'' sell @ worst time'' i dont believe that , no new trader is that consistent.
Something turning around ''one hour after he, original poster, sold'' LOL/ that makes no difference unless it happens all the time , in that case, his stops are to tight

 

[smallfil]

%%
BUT even she did not ''sell @ the worst time'' She made a small profit.
AS far as new traders'' sell @ worst time'' i dont believe that , no new trader is that consistent.
Something turning around ''one hour after he, original poster, sold'' LOL/ that makes no difference unless it happens all the time , in that case, his stops are to tight

I have been teaching her how to trade and she followed my trades. Problem is she is hard headed. Intelligent people are the hardest to teach anything because their egos prevent them from accepting when they are wrong. It is not a question of being right or wrong about a trade but, to be consistent in your approach using the same rules. Each trade should have the same weight and value and more so, when the trade is moving in your favor. "Cut your losses and let your winners run." She ignored this rule. Not a newbie trader but, she has a long way to go.

 

[mute9003]

It happens all the time

 

[benten]

It happens all the time

Yeah, pretty frequently!

 

[sebking1986]

This has little to do with psychology and is entirely due to having no plan. When plan is backed up by solid stats you don't overthink it, just keep executing without worrying too much if any trade is a win or a loss. Doing wrong things at the wrong time is simply a byproduct of not having sufficient research, plan and/or confidence in them.

Statistics certainly help to act with less emotion. Having a tried and testing plan is crucial.

 

[murray t turtle]

I have been teaching her how to trade and she followed my trades. Problem is she is hard headed. Intelligent people are the hardest to teach anything because their egos prevent them from accepting when they are wrong. It is not a question of being right or wrong about a trade but, to be consistent in your approach using the same rules. Each trade should have the same weight and value and more so, when the trade is moving in your favor. "Cut your losses and let your winners run." She ignored this rule. Not a newbie trader but, she has a long way to go.

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HOPEFULLY, she is not familiar with Chicago trading rule ''the smarter you are , the longer it takes''LOL Ted Williams, one of the greatest hitters[.400] said when he got in the zone, he could see the see the seams of a baseball, as it sped towards home plate. My banker dad bought a Sears .22 rifle with his name on it.

 

[MotionX]

I think this happens because of the lack of knowledge and not observing the market properly.

 

[Scataphagos]

Mark douglas talks about how new traders consistently manage to buy and sell at the worst time right before big moves

But i dont remember him explaining why or maybe i didnt understand the way he explained it

looking over my trades i noticed myself doing exactly that also
I would hold and hold and hold through consolidation and then think well sht this is not doing anything so i sell
And it literally starts up trend an hour after i sold
Or a day after i sold...

My advice... "Learn Price TA". Everything the market knows, hopes, expects, and fears... is in the charts. You know when the market has shifted from buying-to-selling and vice versa.

 

[Specterx]

Mark douglas talks about how new traders consistently manage to buy and sell at the worst time right before big moves

But i dont remember him explaining why or maybe i didnt understand the way he explained it

looking over my trades i noticed myself doing exactly that also
I would hold and hold and hold through consolidation and then think well sht this is not doing anything so i sell
And it literally starts up trend an hour after i sold
Or a day after i sold...

Or i see what looks like a good potential uptrend i buy and it reverses to the downside right away


Seems like there are triggers built into charts that "seem legit" for inexperienced traders that push them to make certain moves

1 this consolidation seems like it will never end im tired of this so i sell... it spikes
Examples: dogecoin before spike last year long ass consolidation then sudden uptrend. I sold after waiting for months for it to do something

2 This downtrend is going on forever i dont know if it will ever end, i sell and it reverses because the trend was so painful to watch it was like the last nail in the coffin that people just give up and sell
Examples: nvcn brqs sos they all have that slow painfull torture downtrend

im looking for general psychology not the above specific stocks
Are there triggers built into charts that new investors fall for?
What makes new investors buy and sell at the wrong times. Obviously the see something on the chart that triggers their feels to buy and sell

To some degree this is a cognitive bias. Without a proper methodology, your results are random but you remember the near misses and "coulda woulda shouldas". Randomness and volatility in the market makes it seem like many trades were just off the mark, even if in reality you were miles wide of it.

The big factor, though, is that especially in highly speculative retail gambler markets like crypto, everyone is cuing off the same chart lines/points and moving averages, and at a more macro level the charts reflect the herd behavior of humans lurching between fear and greed. Unskilled traders succumb to fear and greed in roughly the same predictable way, with their stops placed at the same levels, etc. whereas skilled traders are able to navigate these environments while mostly avoiding the traps.

 

[MACD]

To some degree this is a cognitive bias. Without a proper methodology, your results are random but you remember the near misses and "coulda woulda shouldas". Randomness and volatility in the market makes it seem like many trades were just off the mark, even if in reality you were miles wide of it.

The big factor, though, is that especially in highly speculative retail gambler markets like crypto, everyone is cuing off the same chart lines/points and moving averages, and at a more macro level the charts reflect the herd behavior of humans lurching between fear and greed. Unskilled traders succumb to fear and greed in roughly the same predictable way, with their stops placed at the same levels, etc. whereas skilled traders are able to navigate these environments while mostly avoiding the traps.

@Specterx This may be the Most Intelligent Post ever seen on ET -- Thanks. What you posted is Clear, Concise, and should be noted by all that are fortunate to have read it. (Hopefully others will understand and value what you posted.)