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Well said Skate.For the first few years of trading I was overtrading and the bank was making more in brokerage than I was earning from trading.Second, I was following the trading text book and baling out when prices broke my stop losses only to find the next day they recovered and yet again I'd sold at the bottom. This when to hold and when to fold is the single hardest thing to get right for short/medium term traders and while I get it right much more often than wrong these days, there isn't any formula I've found that tells me how far to hold past a stop loss. And holding past a stop loss is something I and the text books tell new traders to never, ever do - it is the single most dangerous thing to do as a trader. If you don't adhere strictly to a stop loss then you are not trading, you are gambling. So, yes, a bit of gambling on my part by fudging stop losses - and certainly a case of do as I say, not do as I do for anyone without say 3 - 5 years of high level T/A and active trading under their belt.What do I do these days? Well if my T/A says price is going to turn up about now (bearing in mind that T/A is only right about 75% of the time at best) and I get to the point of thinking ' that's it, had enough I'll close this one out', I'll hold another day or two (subject to said stock price not acting wierdly). I figure Mr Murphy is waiting in the wings for me to sell and if I decide to, but then don't, I might beat him at his own game! Not great logic, but it seems to work more often than it doesn't.IFM is one where I got caught on its plummet in price when its CEO walked. Based on T/A I expected price to recover and with little to lose, I held rather than bail (my stop loss was lying bleeding on the floor after the price fall). Price rose but then fell back to retest the lows and actually made a lower low (another signal to get out of town). It has jumped about 5% in the last 2 days and while it lost a bit off its highs yesterday, I'm hoping I've beaten Murphy again. IFM might take a long time to get back to its previous value but I'll be happy to take a small loss rather than a big loss if it proves the recovery is too drawn out for me.PS: IFM stopped 2 cents shy of where I thought it would thereafter be a truly lost cause, so I won't be suprised if the price yet again tests its lows. So far thise week price has made a candle that looks like one that suggests reversal (as in higher prices after reversing the prior downtrend). Still a work in progess that could see my plans dashed and broken on the jagged rocks at the bottom of the abyss I'm peering over the edge at.[ATTACH=full]132420[/ATTACH]
Well said Skate.
For the first few years of trading I was overtrading and the bank was making more in brokerage than I was earning from trading.
Second, I was following the trading text book and baling out when prices broke my stop losses only to find the next day they recovered and yet again I'd sold at the bottom. This when to hold and when to fold is the single hardest thing to get right for short/medium term traders and while I get it right much more often than wrong these days, there isn't any formula I've found that tells me how far to hold past a stop loss. And holding past a stop loss is something I and the text books tell new traders to never, ever do - it is the single most dangerous thing to do as a trader. If you don't adhere strictly to a stop loss then you are not trading, you are gambling. So, yes, a bit of gambling on my part by fudging stop losses - and certainly a case of do as I say, not do as I do for anyone without say 3 - 5 years of high level T/A and active trading under their belt.
What do I do these days? Well if my T/A says price is going to turn up about now (bearing in mind that T/A is only right about 75% of the time at best) and I get to the point of thinking ' that's it, had enough I'll close this one out', I'll hold another day or two (subject to said stock price not acting wierdly). I figure Mr Murphy is waiting in the wings for me to sell and if I decide to, but then don't, I might beat him at his own game! Not great logic, but it seems to work more often than it doesn't.
IFM is one where I got caught on its plummet in price when its CEO walked. Based on T/A I expected price to recover and with little to lose, I held rather than bail (my stop loss was lying bleeding on the floor after the price fall). Price rose but then fell back to retest the lows and actually made a lower low (another signal to get out of town). It has jumped about 5% in the last 2 days and while it lost a bit off its highs yesterday, I'm hoping I've beaten Murphy again. IFM might take a long time to get back to its previous value but I'll be happy to take a small loss rather than a big loss if it proves the recovery is too drawn out for me.
PS: IFM stopped 2 cents shy of where I thought it would thereafter be a truly lost cause, so I won't be suprised if the price yet again tests its lows. So far thise week price has made a candle that looks like one that suggests reversal (as in higher prices after reversing the prior downtrend). Still a work in progess that could see my plans dashed and broken on the jagged rocks at the bottom of the abyss I'm peering over the edge at.
[ATTACH=full]132420[/ATTACH]
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