execution issues/too risk averse

[jacknapier]

A lot of times I will hesitate to get into a trade because I'm too risk averse. I got caught in THQI last Dec and that kind scared me away from entering trades.

Like, I was going to go short JCP on the 30th, but morning came JCP just took off to the downside without me. I wasn't expecting such a dramatic sell off, but I should have entered anyway as soon as I saw that it was gapping down.

Today, it happened again with FAST. I was going to enter short at 39.70, but hesitated and now I'm not in and my broker closed for the day.

It's kind of like being tongue tied. Like, if some really hot busty blonde is flirting with you and you're at a loss for words. I don't know how to deal with this. Anyone have any ideas?

 

[Rhody Trader]

Back your trade size down to so small that any loss you might take is so small as to be inconsequential. If that still doesn't help you pull the trigger it's not risk aversion but rather the fear of being wrong which you need to sort out.

 

[Martinghoul]

Along the lines of what Rhody said... Just think of the maximum downside, imagine that it's happened and make sure you're OK with it. Once you've done that, you got nothing to lose.

 

[jacknapier]

Along the lines of what Rhody said... Just think of the maximum downside, imagine that it's happened and make sure you're OK with it. Once you've done that, you got nothing to lose.

Hmm...Yea, I do do that. I've since developed a satisfactory r/r ratio. But, thinking about the problem further last night, I don't really think it has to do with fear of losing money. I don't want to lose money, I don't think anyone does. It's more of being tongue tied. I like my analogy. I don't know how shy any of you are, I used to be very shy when I was younger and I would have this problem talking to people, esp. hot women. But, that's what it's like, a really hot busty blonde is flirting with you (I see a good trade opportunity) and I know all I have to do is say a few words and I'd have an awesome saturday night (click verify order and ca-ching$$$$).

 

[Martinghoul]

Well, my recipe is generally what worked for me with the ladies, as well.

 

[pocketaces303]

Try and not think of it as money - think of it as just ticks or points. As soon as you start thinking of it monetary terms it's very difficult to pull the trigger

 

[Shakone]

Hmm...Yea, I do do that. I've since developed a satisfactory r/r ratio. But, thinking about the problem further last night, I don't really think it has to do with fear of losing money. I don't want to lose money, I don't think anyone does. It's more of being tongue tied. I like my analogy. I don't know how shy any of you are, I used to be very shy when I was younger and I would have this problem talking to people, esp. hot women. But, that's what it's like, a really hot busty blonde is flirting with you (I see a good trade opportunity) and I know all I have to do is say a few words and I'd have an awesome saturday night (click verify order and ca-ching$$$$).

Don't underestimate the value of confidence, in both your trading and your analogy.

How does a tongue-tied person get confident and then successful with chatting up girls? Lots of practice of doing it, striking out, realising that it's not the end of the world if you do (relates to what martinghoul was saying), discovering ways to strike out less, and over time your confidence will improve, and you'll be less hesitant about doing it.

I would say though, that sometimes a lack of confidence is telling you something important. In my own experience, I've had a lack of confidence in taking trades at different times for several reasons. Trading too large is one...having a clear idea when to enter but not always how to deal with every situation once in a trade i.e precise management of the trade - stop movement and partial profit taking - from start to finish, in all circumstances (news coming out soon, market closing soon, entry is running straight into resistance etc).