Short term trading versus day trading

[n00m]

Hi,

I have been short term trading for about 3 months.. have clocked up quite a few trades, most of which last between a day and a week. Its not strictly day trading ie buy and sell the same day. I aim for that but sometimes Mr Market does whatever he wants and it takes a little longer... I got myself stuck in some trades this way and so far have avoided making losses, but I can't shake the thought that leaving the parcel in, instead of making a loss, could also be considered "losing" as it deprives me of the opportunity to take other trade opportunities.

How do other people handle this conundrum?

Thanks!

 

[merlinnn]

Hi,

I have been short term trading for about 3 months.. have clocked up quite a few trades, most of which last between a day and a week. Its not strictly day trading ie buy and sell the same day. I aim for that but sometimes Mr Market does whatever he wants and it takes a little longer... I got myself stuck in some trades this way and so far have avoided making losses, but I can't shake the thought that leaving the parcel in, instead of making a loss, could also be considered "losing" as it deprives me of the opportunity to take other trade opportunities.

How do other people handle this conundrum?

Thanks!

Its certainly a problem we all face with finite capital. In my very limited experience, as long as you are following your strategy and dividing your capital accordingly you are doing the right thing.

If an investment is not performing as per your strategy certainly get rid of it and invest in the next suitable candidate, but not because there appears to be better opportunities. I did this when i started without having a strategy and chased my tail with little to no returns. In hindsight if id stuck to my plan it would have worked out much better!

 

[tech/a]

Are you trading shares?

 

[Trembling Hand]

How do other people handle this conundrum?

If you cannot handle regular but small losses the market will relive you of having to handle them at all sooner or later.

 

[n00m]

Are you trading shares?

Yes I am. I looked at CFDs as well (for shorting shares) and didn't like it. I haven't tried anything else.

 

[Nortorious]

Hi,

I have been short term trading for about 3 months.. have clocked up quite a few trades, most of which last between a day and a week. Its not strictly day trading ie buy and sell the same day. I aim for that but sometimes Mr Market does whatever he wants and it takes a little longer... I got myself stuck in some trades this way and so far have avoided making losses, but I can't shake the thought that leaving the parcel in, instead of making a loss, could also be considered "losing" as it deprives me of the opportunity to take other trade opportunities.

How do other people handle this conundrum?

Thanks!

Don't get caught in the trap of many newbies and also mum and dad investors/traders, that is "when it gets to my purchase price I'll sell and at least break even"... When I was starting out and had no idea what I was doing I wiped out basically my whole account with this one motto.

Granted I was only 16 or so at the time but market experience gets you there in the end, and sometimes the hard way is the best way.

My advice would be to have a strategy of where you can place a "stop loss" and don't ever move it down, you can move it up as the stock moves north (becomes a trailing stop loss). Learn about stop losses and determine a method that works for you and you will save yourself heartache and lots of time learning the hard way.

 

[n00m]

If you cannot handle regular but small losses the market will relive you of having to handle them at all sooner or later.

Agreed, but the bit I am struggling with is how you know which way to go, given that normally for me the stock does not plummet, but rather goes nowhere for a bit. I might be slightly below break even or just under my take-profit while this is happening. If I see anything in the charts that I don't like, I get out. What I'm looking for is what things might help me to arrive at a hold or sell decision more quickly when the stock is apparently treading water.

 

[banco]

Agreed, but the bit I am struggling with is how you know which way to go, given that normally for me the stock does not plummet, but rather goes nowhere for a bit. I might be slightly below break even or just under my take-profit while this is happening. If I see anything in the charts that I don't like, I get out. What I'm looking for is what things might help me to arrive at a hold or sell decision more quickly when the stock is apparently treading water.

Use a time stop.