Often, the questions I receive are direct and to the point. Just as often, underneath the stated concern is a larger issue. The question below is an example.
I am new to trading and have been making numerous rookie mistakes, mainly letting my emotions take over and not reading my indicators correctly. I feel I have done better at both lately.
This is good. A beginning trader is recognizing an important issue (emotion in trading), and then developing some confidence around rectifying that issue. This will help him more than he knows in developing his trading skill set.
However, I am having trouble with bids. There have been numerous times where I have a winning stock and the price has reached my target, but the bid is trailing. While I am waiting for the bid to advance, the stock turns. This is where my emotions kick in and I either sell too soon, or worse hold too long.
It appears that he has a profit target, which is good, but as his trade approaches his profit target, he is waiting to hit it exactly, which could be bad at this stage of his “career.” I have a personal story and a suggestion …
At the very, very beginning of my trading, one of my first stocks started running up fast. I kinda panicked, but in a good way. I excitedly called my mentor to ask him how I should deal with it. After he stopped chuckling, he said, “Get out with a profit. That is the best thing you can do for yourself right now.” My advice to you is the same. Stop trying to be so exact with your profit target. When you are “in the money,” do one of two things. Either place a tight stop that will leave you with some profit (I prefer trailing stops), or simply exit the trade at the market price. The best thing you can do for yourself at this stage of the game is to take profit, no matter the size. If you do this, you will start building your bank and your confidence.
Am I missing something? I am trying to apply all that I have read; every tutorial speaks of price when exiting, never of bids. Sorry to ramble.
My friend, you are not rambling. This is a tough game, and it demands that you figure it out before you can be successful. You are trying to do that, even if you are confused and frustrated. Additionally, keep applying what you are learning and accept that you will lose. The goal is to win more than you lose, so start putting wins in your column. Don’t wait around to “hit” your targets spot on. Take the money and get on to the next trade. Eventually, you will figure it out and you will become flexible with the tools at your disposal. Remember, making money is the name of the game. Don’t confuse that with the idea that you have to make as much as you can on every trade all the time.
Trade in the day – Invest in your life
