It has been a rocky week in my practice-trading. I have shelved my old ways for the most part and am trying to approach training in a different way, the correct way. Over that timeframe, I did revert once back to doubling up on a losing trade after not stopping it out, and paid a heavy price for it (metaphorically speaking); because I do not practice-trade with real money. But I only did it once.
I have put up a lot of losing trades over the past eight to ten days while I try to adopt a method/edge to what I have learned about the patterns of movement that stocks make every day. This is tough to take because I am putting up losers and am having to face the fact that I have to "un-learn" my bad habits, some which I have tried to perfect for two years. Just as a tennis player who wants to go pro must not "run around his backhand to hit a forehand" but must instead perfect the backhand stroke, I must ditch my old ways. I have some big losses where my method wasn't appropriate to the chart area and I just got frustrated and let the loss run; moving on to other things. Walking away from the problem will not solve anything. Mental toughness is going to be the last hurdle to clear for me, as it is for most people who try to trade professionally. As I clarify and hone my edge over the next few months, I believe it will be easier to systematically set and obey mental stops. In addition, I'll develop confidence on where to place hard stops in case I have to get up from the computer with a trade on. Of course, I could just set hard stops every time and solve my problem that way... but that doesn't teach me anything. The hard stop is a crutch in this case. I can't cheat the devil. I have to stare fear in the face and beat it in order to progress in a healthy way. I am tired of "running around my backhand" when it comes to trading. Screw that.
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I will continue to put up losing trades, some big losers as I struggle with setting stops in correct areas as well as attempting to teach myself to reverse direction after stopping out. This is crucial, because what I have found in all but one instance of taking a loss in the past ten days is that had I simply reversed direction, I would have had a big winner after the stop-out. It only makes sense, right? I'm playing stocks with high ADR; they move big. If it doesn't go the direction I choose, the likelihood is it will move big the other way.
