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Member You - Online Investing & Online Stock & Share Trading: Difficulty in Taking Stop Losses in the Market
Do you know what’s soaring and trying to touch the sky? The cost of education. Evidently there arises a need for student loans. There is no doubt there are scholarships and grants but they do not always make sure that the cost of education is paid for. 64% of students borrow loans for their educational needs. Student loans can actually help you pursue dreams especially if they are build on a platform called education.Many people borrow money for various things like car, home, vacation etc that they can’t pay for right away. Student loans are just one of the ways to fund education if it is expensive for your budget. If money is not available, this of course can happen with any student. Under any circumstance it is better to take student loans rather than drop the idea of studying further. Financial institutions are readily offering loans to young students.Lenders are frequently offering student loans. But students are usually young people with lit
Then fear really hits - gut wrenching fear as you see your capital decimated - 20 years of working multiple jobs to get ahead & most of it all gone in months ....... sleepless nights for weeks then months .......And you still have to try & function at work by day when you've been pacing the house night after night - your mind goes, your memory goes, your reasoning goes - and our waterfront home went.
And all of that can be traced back months previously to a series of small decisions that evolve around
I was driving down to one of my clients Keytek UK Limited one morning recently, on a lovely summer’s day, listening to Michael Gerber on my CD player. I have a rule that if I am in the car on a work day, that is work time, so I must use this time to improve my knowledge in some way (you should try this it is a great way of learning about running a successful business).Gerber is the author of the e-myth and one of the world’s leading experts on small business.To be honest, I was only half listening, when suddenly he said something that made me ‘prick my ears up’.He started talking about how McDonalds first started. Ray Crock walked into the McDonald brother’s restaurant when it was a small local restaurant to sell them a milk machine. Ray noticed that the McDonald brothers had a fantastic business and so he approached the brothers asking to buy the franchise rites to McDonalds and as they say the rest is history.History shows that Ra
A stop loss is a predetermined exit point. When a trade is first planned, the stop loss is designed to protect the trader’s capital. The exact price of the stop loss is the result of a relationship between the maximum level of risk as determined by the 2% rule, the logical support levels on the chart, and the amount of capital the trader wants to allocate to the trade. By varying these three figures, the trader is able to reach an ideal trading solution that controls risk effectively.
A stop loss order should always be constructed at the same time that any trade is planned or entered. Disciplined stop loss sell orders are the key to long term trading success.
The new chat room Stockmeetingplace.com has an educational bias where traders from around the world come to exchange ideas, swap exploration formulas and discuss trading techniques.
Many topics are covered and for the benefit of readers who may not have read the following, this article is based on four posts on Stockmeetingplace which were recently provided by two regular contributors to this newsletter and myself on the subject of the difficulty in taking stop losses.
This topic was introduced by a new trader Jim who wrote:
Okay I'm going admit it, "I find it hard to act on stop losses". I know I'm not the only one.
Many possible reasons ...I'm comfortably ahead this year anyway...the companies are fundamentally sound with good prospects...the price decline defies common sense (this is a common thought). I've pondered on this for some time now.
Anyway, I know I've got a problem that could bite me hard if the market turned nasty. For those of you that have been here but overcame it, please share your thoughts on how you did it.
In response, John Atkinson replied:
"In Daryl's first book Share Trading he uses the analogy for wannabe traders of learning to put down notes on the footpath and have someone pick them up & walk away with your money. During the tech stock run traders worldwide felt they were invincible as stocks soared at an incredibly fast pace. During those times we found it easy to sell out at losses when you were making up for it on other profitable trades.
Then one week the party was over - and all of a sudden its not any fun anymore as you see red on any screen you look at - and no more green up days
First of all regret hits you - wishing you hadn't listened to that broker who told you to hold - regret you hadn't got out sooner - regret you hadn't acted on your stop (if you set one in the first place) or not bought such a large position or too many positions or had actually taken the time to get some education on technical analysis, psychology and risk management in the first place
This then moves to hope - the BHP approach - Buy Hope and Pray - you find yourself looking at the charts or screen hoping the share will turn around - believe me the share can't hear you - it doesn't care about you or your hope - it always did and always will respond to supply & demand and if no-one wants it , it's headed South.
Then fear really hits - gut wrenching fear as you see your capital decimated - 20 years of working multiple jobs to get ahead & most of it all gone in months ....... sleepless nights for weeks then months .......And you still have to try & function at work by day when you've been pacing the house night after night - your mind goes, your memory goes, your reasoning goes - and our waterfront home went.
And all of that can be traced back months previously to a series of small decisions that evolve around
Sending birthday ecards to colleagues to express your friendship and care, is one of the easiest ways to show your warmth and feelings for them. Most of us operate with colleagues. Few people work from home, but even they have some business contacts. Otherwise one can expect a team of ten or more working together in a modern office. The goal of the team is to achieve common goals. To do that it is important that the atmosphere is friendly and cheerful. One most important element is care. If I feel that my colleagues care for me, I appreciate that much more than any thing else.Most of are always busy with our work and that makes us forget important things in life. Remember urgent always takes precedence over important. That is the reason most colleagues forget birthday of their co-workers. Here is the easy way out. Make a sheet with names of all the co-workers and circulate that in the beginning of the year. Ask everyone to fill in their name and birthda
The new chat room Stockmeetingplace.com has an educational bias where traders from around the world come to exchange ideas, swap exploration formulas and discuss trading techniques.
Many topics are covered and for the benefit of readers who may not have read the following, this article is based on four posts on Stockmeetingplace which were recently provided by two regular contributors to this newsletter and myself on the subject of the difficulty in taking stop losses.
This topic was introduced by a new trader Jim who wrote:
Okay I'm going admit it, "I find it hard to act on stop losses". I know I'm not the only one.
Many possible reasons ...I'm comfortably ahead this year anyway...the companies are fundamentally sound with good prospects...the price decline defies common sense (this is a common thought). I've pondered on this for some time now.
Anyway, I know I've got a problem that could bite me hard if the market turned nasty. For those of you that have been here but overcame it, please share your thoughts on how you did it.
In response, John Atkinson replied:
"In Daryl's first book Share Trading he uses the analogy for wannabe traders of learning to put down notes on the footpath and have someone pick them up & walk away with your money. During the tech stock run traders worldwide felt they were invincible as stocks soared at an incredibly fast pace. During those times we found it easy to sell out at losses when you were making up for it on other profitable trades.
Then one week the party was over - and all of a sudden its not any fun anymore as you see red on any screen you look at - and no more green up days
First of all regret hits you - wishing you hadn't listened to that broker who told you to hold - regret you hadn't got out sooner - regret you hadn't acted on your stop (if you set one in the first place) or not bought such a large position or too many positions or had actually taken the time to get some education on technical analysis, psychology and risk management in the first place
This then moves to hope - the BHP approach - Buy Hope and Pray - you find yourself looking at the charts or screen hoping the share will turn around - believe me the share can't hear you - it doesn't care about you or your hope - it always did and always will respond to supply & demand and if no-one wants it , it's headed South.
Then fear really hits - gut wrenching fear as you see your capital decimated - 20 years of working multiple jobs to get ahead & most of it all gone in months ....... sleepless nights for weeks then months .......And you still have to try & function at work by day when you've been pacing the house night after night - your mind goes, your memory goes, your reasoning goes - and our waterfront home went.
And all of that can be traced back months previously to a series of small decisions that evolve around
If you leave a star player sitting on the bench, you could be the loser.Look at it this way. Because you push hard to reach your sales and marketing objectives, you need the help of your top external audiences.If you agree, what are you doing to insure their support? At the least, you need to prioritize those key target audiences and work them hard from the top down because few of us can do them all at once.When I say work them hard from the top, I mean start by monitoring carefully how members of that most important target audience feel about your business. You must interact with them and ask a lot of questions.Notice any negative feelings? How about misconceptions that need fixing? Any inaccurate understandings of your products and services? In short, ANY perceptions about your business that you need to alter?With information like that in hand, you can set your public relations goal. It could be as
Anyway, I know I've got a problem that could bite me hard if the market turned nasty. For those of you that have been here but overcame it, please share your thoughts on how you did it.
In response, John Atkinson replied:
"In Daryl's first book Share Trading he uses the analogy for wannabe traders of learning to put down notes on the footpath and have someone pick them up & walk away with your money. During the tech stock run traders worldwide felt they were invincible as stocks soared at an incredibly fast pace. During those times we found it easy to sell out at losses when you were making up for it on other profitable trades.
Then one week the party was over - and all of a sudden its not any fun anymore as you see red on any screen you look at - and no more green up days
First of all regret hits you - wishing you hadn't listened to that broker who told you to hold - regret you hadn't got out sooner - regret you hadn't acted on your stop (if you set one in the first place) or not bought such a large position or too many positions or had actually taken the time to get some education on technical analysis, psychology and risk management in the first place
This then moves to hope - the BHP approach - Buy Hope and Pray - you find yourself looking at the charts or screen hoping the share will turn around - believe me the share can't hear you - it doesn't care about you or your hope - it always did and always will respond to supply & demand and if no-one wants it , it's headed South.
Then fear really hits - gut wrenching fear as you see your capital decimated - 20 years of working multiple jobs to get ahead & most of it all gone in months ....... sleepless nights for weeks then months .......And you still have to try & function at work by day when you've been pacing the house night after night - your mind goes, your memory goes, your reasoning goes - and our waterfront home went.
And all of that can be traced back months previously to a series of small decisions that evolve around
This is the kind of mistake that most new affiliate marketer will make. Not protecting your affiliate link will cause you to lose a lot of time and money. So this article will list why not protecting your affiliate link will cause you to lose money and what is the solution to solve this problem.Failing to protect your affiliate links is a major blunder and mistake. Link theft is so prevalent these days that your commissions might just be stolen by some very dishonest individual. One of the way that they will be able to do it is to replace your affiliate ID with their affiliate ID. It is thus necessary to hide and cloak your affiliate links whenever you are doing any affiliate campaigns.So what are the solutions to solve this problem? One of the ways that you can do is to shorten your affiliate link which will cloak and cover your affiliate link. You can do it from www.tinyurl.com. The 2nd way that you can do is to buy software that will enable yo
Then one week the party was over - and all of a sudden its not any fun anymore as you see red on any screen you look at - and no more green up days
First of all regret hits you - wishing you hadn't listened to that broker who told you to hold - regret you hadn't got out sooner - regret you hadn't acted on your stop (if you set one in the first place) or not bought such a large position or too many positions or had actually taken the time to get some education on technical analysis, psychology and risk management in the first place
This then moves to hope - the BHP approach - Buy Hope and Pray - you find yourself looking at the charts or screen hoping the share will turn around - believe me the share can't hear you - it doesn't care about you or your hope - it always did and always will respond to supply & demand and if no-one wants it , it's headed South.
Then fear really hits - gut wrenching fear as you see your capital decimated - 20 years of working multiple jobs to get ahead & most of it all gone in months ....... sleepless nights for weeks then months .......And you still have to try & function at work by day when you've been pacing the house night after night - your mind goes, your memory goes, your reasoning goes - and our waterfront home went.
And all of that can be traced back months previously to a series of small decisions that evolve around
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Then fear really hits - gut wrenching fear as you see your capital decimated - 20 years of working multiple jobs to get ahead & most of it all gone in months ....... sleepless nights for weeks then months .......And you still have to try & function at work by day when you've been pacing the house night after night - your mind goes, your memory goes, your reasoning goes - and our waterfront home went.
And all of that can be traced back months previously to a series of small decisions that evolve around getting the right education and developing discipline for correct position sizing, capital allocation, setting your initial stop, moving up trailing stops and exiting your stops when they're triggered.
Hope this helps you in what you consider now to be a dilemma. I also hope this helps you decide whether trading is actually for you or not and please realise it's okay to say no and seek your fortune in other endeavours, in which case we applaud you for your decision.
I mean this with sincere conviction - trading is not for everyone and sorry to be appearing tough on you but acting on stops is tough - and the alternative is much tougher, believe me."
To this Jason Mitchell added
"Well done on being honest. I think as you say many people do have trouble acting on stops. I would like to tell you there is a nice simple way but I think for many people it takes losing money. It did for me anyway. This is because of our beliefs.
I noticed in your post you wrote "the companies are fundamentally sound with good prospects...the price decline defies common sense (this is a common thought)"
I am assuming these are your thought processes. Thought processes are generally underpinned by our beliefs. I have no trouble acting on stop losses because I have lost money in the past not doing it. My belief is that working on fundamentals and common sense loses me money while acting on stops helps make me money. Your belief however may be that the fundamental opinion of a company is meaningful and that price will come back.
I am not saying you are wrong and the others are right. Every body has a different way of trading. Many fundamental analysts have no time for technical views - if they make it work that is fine. I believe using technical analysis is a numbers game. Minimise losses and put the balance of probability on your side. In order to do this stops are generally needed.
Changing beliefs for the most part (I think) comes from our experiences. For example I love dogs but if I got mauled tomorrow by a pit bull I may be less caring next time I see one running across the road... Maybe this answer is not what you are looking for but while ever someone is trying to adhere to another person's belief when it doesn't seem right to them, there will always be trouble maintaining discipline.
The only suggestion I can make is extensive research on your approach. Seeing factual results can be hard to deny especially when there is a repeated pattern that becomes visible. This could be done through back testing but this is more difficult with fundamental and technical combined. Hope this helps in some small way. I admire your honesty."
I added my perspective on this subject with the following:
"Consistently exercising stop loss discipline is the greatest challenge and barrier to successful long term trading. Our desire to avoid experiencing the pain of losing is hardwired.
Once you have created a discipline to take a series of losses you tend to find tha
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