Stop Loss

[DaveGos]

As a novice trader I discovered today that I can get just as much of a kick out of strictly applying my stop loss, despite all of my emotions telling me to ignore it. I had bought in at what I thought would be support only to see my 1% stop loss hit ten minutes later. Well I forced my hand onto the mouse and I'm happy that I did as the share price continued like a stone until the end of the day. I look upon it not so much as £300 lost as £1000 saved.

So I would like to thank all of those contributers who preached the Gospel of Account Management on this BB. You have not only saved me the grand today but I suspect many more in the future.

David

 

[FTSE Beater]

Hi David

Congratulations!!!!!! on taking a small loss.
It took me years to learn how to do that!!

 

[Tullibody]

I am trying very hard to banish the word "if" from my vocabulary especially as in "if only...". Instead I am trying to just do it, basis a small potential loss looks miles worse after it has been allowed to grow tenfold (as mine frequently have done). If you're out and it turns you can always get in again and if it doesn't you can take a well deserved preen. Still find the impulse to set fire to my own money strangely compelling however. Keep the faith DaveGos

 

[Skimbleshanks]

DaveGos - well done! If you can religiously apply your stops, then you can only end up winning.

The smaller the loss you take, the better your trading will become. And if each loss represents no more than 1% of your trading funds you can merrily have loads and loads of consecutive losses before getting wiped! And that is what this game is all about - staying in the game for the following day.

 

[orchard]

Although I am trading very little at the moment, I am trying to keep my hand in by trading the S+P daily cash occasionally.
Thank God for stops. After entering the trade I place an emergency stop, then watch the movements like a hawk.
I have found it very beneficial to have a mental stop in place, or to try and judge when the trade is really just going the wrong way.
This has saved me a mini(very) fortune, and have got out of some trades with a tiny loss.
The trailing stop is something I always use either to lock in profit or to minimise loss even when it means exiting a trade with lesser profit.
Just lately though I have been getting more right than usual (must watch out for overconfidence).
Now all I need to do is apply to a wider spectrum of trading

 

[Skimbleshanks]

Now all I need to do is apply to a wider spectrum of trading

I understand what you mean, but if you're doing well in one market with one style of trading, why alter it?

Surely it would be better to just keep plodding away at that market, getting to know it better, and slowly increasing the number of contracts you trade (or amount your spreadbet)? Of course, you'll need to ensure you're still within your money management rules and risk tolerance.

If you're making money and being consistent (that's the key to this game as I'm sure you're aware), then just go for more of the same. So many people have the urge to continually tweak their system that they end up turning a winning system into a losing one. If it doesn't itch, don't scratch it!

By concentrating on one market you will be building your confidency level, as well as your profits. You'll find that you become more relaxed as your pot of money grows, so slowly and steadily is the way forward.

 

[orchard]

Thank Skim for your usual dose of sanity. I do not intend to trade anthing else at the moment - apart from paper trading, so I will take your advice.
The beauty of the S+P I find is that I can trade small amounts which keeps me well within my tolerance level although I must admit to being quite tempted sometimes to increase my stake (have resisted at the moment!).