Day Trading & Forex Forum

Beachtrader

Hi there,
Imagine a scenario. Newbie spread better (who trades FTSE350 2-5 days) gets up on a Monday morning and goes to his PC to check on the orders he placed last night having finalised his weekly set-ups and noticed some possible triggers. For the sake of clarity imagine that he places 6 orders - 4 buys and 2 sells.....
The markets open and by the time he checks (8.50am) the 4 buys are all plummetting and the 2 sells are already up - every trade nearly touching their stops. In other words it looks as though, despite a weekend of checking and re-checking stops, limits etc., everything seems to have gone wrong and his system (or what he thinks is a system) is rubbish. Being pig-headed he turns off his trading platform and goes out to spend a morning convincing himself that he must believe in himself and his reasons for placing the trades he did - the worst that can happen is that his stops kick in, he loses a manageable amount of cash and its back to the drawing board.... The other side of him is saying he is rubbish, should give up trading and do something else with his time and money - what sort of idiot would be buying FTSE350 stocks on a day when the FTSE is going down???

Anyway the newbie comes back at 12.30pm to find all of his trades now going the right way with 2 about to close out at their pre-set limits. Suddenly he is filled with a sense of satisfaction and thinks he may have learnt something about trading psychology, or at least how to trade better. In other words he must believe in himself, his system, and his trades.

I've only been doing this for a few weeks but that's what hapenned to me this morning. Have I just learnt an important lesson? Is it a good idea (if you're trading 2-5 days) to switch off from the screen during the day? If I hadn't had stops in place I would probably have closed every trade by 9am!!??
Cheers for any advice
KJ

Masquerade

I think a better lesson is not to jump into stocks first thing on monday morning.

megamuel

.... and they could well go down (up for shorts!) again in the afternoon... Thats the nature of this business I'm afraid! But your right, the key is not to get emotionally attached to your trades - be a machine! If your trading 2-5 days, you have your stop orders and limit orders (if you use them) in place, then you don't really need to watch constantly. I am not an experienced trader, but I am sure some of the time served guys (and girls) in here will tell you that fear, greed, and all other emotions are down there with poor risk management in the traits of an unsuccessful trader. So its important to condition yourself not to have negative thoughts when trading, if that means not watching your screen for a bit then so be it! Anyway, who am I to give advice! All the best with your trading. GOOD LUCK!

Sam.

Beachtrader

I think I have 2 new rules then...

1) Don't trade first thing on a Monday morning
2) Don't look at laptop between 8am and 4.30pm

KJ

foredog

If you follow both your rules then you won't trade mondays full stop......

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UKtradergirl

The solution is- define your strategy, and stick with it. You put your stops and limits in a certain place for a certain reason. Therefore, unless there is something drastic to change this (major news event, etc) you should leave the trades to run their course. If you start altering the plan after you have entered- it can easily go against you as well as for you. Taking out six trades at once is a lot for someone new to trading too--- make sure that if you lose all 6 trades (which will happen sometimes) it is not creating a huge drawdown on your account.

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