Lets say you go long the market at XX, but the market moves lower, so at this point you think that you've got an even better deal to average in on your original entry. Do you really know the future and how far this trade will go against you?
I'm bringing up a point of a major problem that I've faced as a trader. STOPS.
When I'm in the zone, I will exit a bad trade for a small loss and move on to the next one. When I'm trading relaxed or I've built a cushion of profits from previous days I will let my guard down and give a bad trade more room to breath and end up losing more money than I should have. Have you ever lost weeks or months worth of profits from being too relaxed or by breaking your "rules"?
Have you ever averaged your trade or widened your stop? There are a couple ways to deal with your problem of NOT taking stops.
1.Take out excess money in the account to the point to where you can only put on 1 trade and not be able to average into it.
2.Trade with a platform that has an automated risk management parameter that will close your position when you are down XX amount for the trade or reached a max daily loss.
3.Start working with another trader that can help train you on using stops.
4.Realize that you are not trading with a plan/system before you put on a trade, because your plan was for the trade to work in your favor immediately and not let it run against you.
5.Develop an Automated Trade System that will trade for you and take your emotions out of the trade.
Here are some of my Key Posts dealing with stops and problems traders face-
Realistic Expectations of your Trading Results
Dr. Brett goes over A Few Trading Psychology Observations
The stock market ruined my life
For FX.
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