How long to hold when a trade goes wrong?

King Tut

Newbie
7 0
Thanks for the replies and advice so far re; doing this full or part time. Its excellent advice and I shall be taking it on board.

I have one question regarding trades. Since its another topic, I thought it best to start a new thread.

The question is how long do you guys hold on for if you get the trade wrong? This is the one question that I would really like to know.

Initially, my strategy was to buy at a price that made sense short and long term. The time period would ideally be for the very short term but if the trade didn't play out as I expected, I would hold knowing the price made sense on a long term view (on fundamentals).

I think this view is naive. If I was to have an exposure of 100K, that's £140 per week in interest for every week I keep the CFDs. That's capital I cant afford to lose. So my plan is to close positions within a day even if it means a loss. By keeping trading to just 5 stocks, I should be able to trade more gains than losses. I only need a 1% move to make £1000 on a 100K trade.

For the experienced traders - do you hardly ever get it wrong after building the requiste experince/knowledge? What do you do if you do?

BTW I hate stoplosses. You might wait weeks for the stop loss to be triggered and then you've sold at a greater loss and incurred the extra interest.

Does anyone have any comments/thoughts suggestions?
 

adrianallen99

Established member
630 4
>>>>>The question is how long do you guys hold on for if you get the trade wrong?

Everyone has losing trades, it is part of trading life, you set a stop and stick with it. If it hits your stop and loses you money it hasn't gone wrong.

>>>>>Initially, my strategy was to buy at a price that made sense short and long term. The time period would ideally be for the very short term but if the trade didn't play out as I expected, I would hold knowing the price made sense on a long term view (on fundamentals).

Fine, stick with your stops and if it starts to move up, great.

>>>>I think this view is naive. If I was to have an exposure of 100K, that's £140 per week in interest for every week I keep the CFDs. That's capital I cant afford to lose. So my plan is to close positions within a day even if it means a loss. By keeping trading to just 5 stocks, I should be able to trade more gains than losses. I only need a 1% move to make £1000 on a 100K trade.

When you make a trade, you need to take into account Commission, Interest, etc.. If you can't afford to lose/pay these, then trade smaller amounts. You should be able to afford to lose all your capital. If I lost all my capital tomorrow, it would be a pain, but it would have no impact on my standard of living. Don't just close a position to avoid paying interest - you still will pay commission and just end up throwing money away. It is fine to set a time limit though - when I traded stocks, I use to say if a position hadn't moved into profit after 3 days, I would relook at the position and make a decision to hold or sell.

>>>>For the experienced traders - do you hardly ever get it wrong after building the requiste experince/knowledge? What do you do if you do?

Experienced traders accept they have got it wrong, they get out and they move on.

>>>>BTW I hate stoplosses. You might wait weeks for the stop loss to be triggered and then you've sold at a greater loss and incurred the extra interest.

You will love them if you only lose £100's instead of £1000's.


All of the above is just an opinion and Im sure other people have different ideas, Ive never traded CFD's so cant comment on some of the issues.
 

Trader333

Moderator
8,647 977
This issue is not about being right or wrong in a trade it is about having a plan for any eventuality and executing it depending upon what it is that happens. If you execute your plan then you have done the right thing whether it is a profitable trade or otherwise.


Paul
 

TheBramble

Legendary member
8,394 1,170
King Tut - You have an entry price and two exit prices.

One exit is a stop - if the trade goes against you and hits that predetermined level - you get out. No second-thoughts. No hesitation.

The other is your target price. Which can either be an absolute value or as a trailing stop.

There are no 'wrong' trades or losing trades. The only wrong ones are the ones that you enter or exit outside of your criteria - whatever they may be.
 
 
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