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Don't Get Spooked! One thing I've noticed that is starting to change in my trading style is that I don't freak out so much now when a trade goes into negative territory. I used to pull a face just like this cat above, and just shut down my positions at the speed of light before they got any worse, but now I don't.Instead I go "whats going on here?" This increasing ability to pause a moment and re-evaluate has been saving me money. Firstly the thing to ask oneself is "are the reasons I entered the trade still valid?" - I just looked at two trades I'm in at the moment and they are slightly down, but when I stop and look it just looks a hell of a lot like a minor retracement. Instead of diving out like I used to, I made no change at all. Worse case scenario I get stopped out for 2% as per my allotted risk. The other thing to ask is what kind of a market is this? What's the trend? Is it behind me or against me? If I no longer like the trade I will look for a break even opportunity and get out flat. I've done this several times this month, including yesterday. I just didn't like the look of the trade anymore, but it was a sideways market meaning my chances of getting out even were good, and I did. The main point is don't get spooked out. Being spooked out of trades is my new focus. My old problem used to be chasing momentum, but I got on top of that - so now I'm working on not getting spooked by the market moves, and building my ability to re-evaluate trades with as much objectivity as possible when I'm in them. |
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