It usually only happens after you completely screw up a trade and totally embarrass the hell out of yourself, because it is then that you wished you had a different strategy. The” woulda, coulda shoulda’s” set in, and the strategy you thought was right for that trade, gets kicked to the curb. You smash your keyboard into pieces, revenge trade for another loss and yell at your wife on the phone. You then start the period of self loathing (this can last a minute, an hour or a day, depending on your personality and how much money you just lost). No matter how bad a day, week or month I’ve had, I never seem to get pissed at myself and the situation for more than a couple of hours, but that’s just me. On two occasions I called the suicide hotline, but they just put me on hold. So as a trader, what and who do you believe?
This is what you hear constantly:
Hold your winners.
Scale out of your winners.
Let profits run.
Always take partial profits.
Sell strength.
Buy strength.
Sell weakness.
Buy weakness.
Take small profits, they add up.
Swing trading or position trading is the only way to make real money.
Hold overnight.
Be flat at the end of the day.
Never average down, but buy the dips.
You have fifty more and so do I. So what do you? It gets as confusing as father’s day in Appalachia. I’ve had bad runs, mini Waterloos and mad successes in the market. The short answer is that all of the above can work in the right combination.
One suggestion I will make is not to change a strategy after a bad trade or a bad run if that strategy works over time. That’s just throwing in the towel and not trying to perfect a given strategy. If your going to make an omelet you will have to crack a few eggs along the way. Time spent and endless hours in front of the screen usually cures most ills. If you are a newer trader, get a mentor you can trust and be a sponge.
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