Taking money BACK!

[BeM]

Hi,
I was thinking of something so much real, as I have felt it spread-betting. Well, that's what I do now, small amounts.
I have come to a point so far from my short experience that it's so amazing that any time I wanted to ...probably have a revenge, or maybe try to get my money back from the market, I ended up making the loss two, three or four times greater. It hasn't happened so often but it has happened for about three times. It's amazing that if someone tries to have the aim of getting back something, or maybe trying to fool the market, they end up giving more and more and more, probably until they learn the lesson not to mess with the stock market
I know very well that everyone must control the emotions and so on, I was just amazed how I never took even one right decision when I had the scope of getting back my money and being upset that the market took my money However whenever I didn't mind and stayed calm and in control, then I thought it was really easy, easy game. It's so much psychological!
Look at my rating....

 

[ChartMan]

Oh Dear,Oh Dear. You must never think of winning back your loss. That's the way to become a member of gamblers anonymous. When it's gone , it's gone, as B&Q say, and it's so true. put it down in the loser column and concentrate on the next trade. Even if it's a small winner, take it and bank it. Don't think" I'll wait till I've made up what I've lost".Still, it looks like you've figured that out now.

 

[Miki]

Lol, BeM. Been there done that – just like everybody else!

Getting emotionally attached to your losing trade very often translates into chasing revenge, overtrading, cloudy thinking and more losses.

With time you get over it and start regarding each trade as a new opportunity to start fresh.

 

[Skimbleshanks]

I know this is so much easier said than done, but what you need to do every time you trade is ... determine where your exit will be IF the trade goes against you.

So set yourself a smallish stop, but wait for the ideal set-up before you enter a trade. It all depends on your trading strategy, but you could wait for a breakout, or a bounce on/off support and resistance, or whatever suits you. If, for example, you used a breakout to enter a trade, you would set your stop a little way below the breakout point to give the market room to move, but not sufficient room for you to suffer a big loss. And, of course, take the stop if you get hit.

Doing it this way is much easier - because you know the small risk BEFORE you enter.

Forget about the reward, just concentrate on your risk. This is the only thing which will keep you safe and happy in the markets. The reward element will just follow on naturally and may be smaller or bigger than you anticipated.

This is the only way to build consistency of winning - by taking most trouble and care over your losing trades.

Speak to new traders, and their objective is reward. Speak to old traders, and their objective is preservation of capital.

I trade ES (emini S&P futures) and my maximum stop is 2 points at my point of entry. My stop varies as the trade progresses, but that is irrelevant to me - what's most important is that when a trade goes against me (and they always do, no matter how good you are) I know precisely what my loss will be.

 

[razorgirl]

BeM, better to take a bit of time out until you calm down if you find yourself chasing losses like that - why not have a max loss limit for the day/week/month, and if you lose that much, walk away until the next day/week/month. Works for me (so well that I have never actually had to walk away!)

 

[BeM]

Thanks all!
You are very much right, this happened to me yesterday actually, long time after it had happened before. Until yesterday I was winning almost everyday, small amounts anyway and yesterday I gave half back
Yeah, I think I must go for a walk at those moments when I notice that emotions take over my rationality. It's easier to say anyway. My strategy is to let the market decide the way, then enter and see how the market is doing after that, if it finds the strength to go my way, then I let it roll, but if it starts to show weakness then I liquidate some, if I have time, and watch later on. I could reverse the position, and it goes well, if the direction changes. But yes, the most important thing is to be in control, and of course, preserve the capital

 

[BeM]

By the way... you know what else I presume is essential in maintaining the right attitude and psychology in order to trade successfully, never think you can beat the market, stay humble, always say "the market is the master". I don't know, however it's easy to say but much more difficult to do.
I actually do determine where to enter and where to get out, approximately anyway.
I trade only S&P 500 now, in the future I think to get into FTSE 100 as well, I don't know it so well yet.

 

[nigepl]

Hi BeM
Have a read of the book THE WAY TO TRADE by John Piper
that will tell you alot about yourself
nig