Give Your Setup a Chance to Play Out

OK, so I got the message. I should take frequent losses in order for the arrival of a bigger win.  But the way I fear a green turning into a red is really getting in the way for me to achieve that.   As I watch my position turns green once in a blue moon, I just can’t bear watching it dwindle back down to zero or red.  Invariably, I ended up taking some meager gains and only to kick myself later for not holding just a bit longer.   If I can’t rectify this, I would never be profitable as profits would never be big enough to overtake the losses.

Here’s the trades on DD that illustrates what I’m saying:

I dutifully took loss on the 1st trade.  Then I re-entered at 53.40 as the price reclaimed yesterday’s low.  I stared at the chart over 30 some minutes but it just couldn’t break 53.50.  When it broke 53.50 but immediately retreated, I gave up and closed the trade as I felt I had to ensure this one being green to help “get even” (another taboo in trading) for my currently losing day.  As the chart shows, 2 minutes later, the stock finally began to move up and I painfully missed out.

One culprit was that this was not the 1st trade of the day, but a trade at a time when I was already down for the day so my emotion was not right – I wanted to get even.   At the very least I should have waited for a lower low before given up on the setup.

So don’t defeat yourself prematurely.  Give your setup a chance to play out.

PS.  The jinx is at work again.  Look at ATVI:

This was a swing trade entered on 50 ma (not shown, the dash line is 20 ma).  First, it lost the support, and luckily I reduced my position by half.   The price when down and finally it came back up and yesterday it almost break even.   Earnings was scheduled to be announced after hours today.  I thought there seemed to be some momentum left to go through earning so I decided to take a gamble.   And of course I lost.  Thanks to the jinx.  It’s trading at 10.90 after hour as I type 😦

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