|
PureBytes Links
Trading Reference Links
|
I would suggest that that are two types of negative trades. The first is a
losing trade. It's not necessarily a "bad" trade. It's when you analyze a
position, put on a trade according to preconceived paramaters, and it goes
against you, but, when it does, you get out, no questions asked. The second
losing trade IS a "bad" trade. It's when the trade goes against you, per the
assigned paramagers, and you DON'T cut the cord, and get out. This
discipline must be followed with absolute rigidity, or, you are really a boat
without a rudder. Losing trades stink (yeah, I know the trading philosophers
who say you've got to "love" your losers - I'm not one of them. "Tolerate"
at best, yes, "love" them, no.). But, the "bad" losers, per the above, can
kill you.
Over the past two years, I've been doing reasonably well. When I sat down to
review, the basic weaknesses in my trading, there were two facets of trading
that stood out, that would have increased my performance, measurably, if I
could have avoided them. First, and foremost, the "downdrafts" - i.e, when a
stock gets hammered due to a bad earnings report, a bad "pre-earnings"
announcement, or the like. Frankly, I have no clue how to avoid those things
from time to time. Second, not letting winners enough breathing room on
retracements, to let them keep running. That is, not wanting a winning
trade to turn into something less - and missing out on a further run up (or
down, if you're short). Hope this helps.
|