weekend aftermarket lounge 25-28th may, page-11

Hello Trees and others! Hope you're having a good weekend.

kmac - thanks for the kudos re: 17 wins. I am sure many people have strung together that many or more. Certainly there are posters on here who seem to always be making profits and never a mention of a bad trade. But then not everybody is into "full disclosure" and some prefer to keep their losses to themselves!!

Yes, I think the better market helped - it was February when I had those wins and markets were better. Also had a run of about 15 wins in November.

Anyway - I went back through the spreadsheet tonight and ran some numbers, etc, and I now have 100 percent confirmation of what I've known for a while - and what others have been saying....which is:

You MUST exit a bad trade quickly and take the small loss.
You must NOT stay in a bad trade and HOPE it will get better, or tell yourself it's got potential, it's only down 2 ticks, it will come back, etc, ad infinitum. The days go by and it slips further away and eventually you have to take a BIG LOSS.

The reason I say this with total conviction: 80 percent of the money I have lost since I started investing / trading, which goes back to Feb 2011, has been lost on trades that went bad and I chose to "wait and see" what happened over a longer period of time.

Put another way, and these are not real dollar figures, just an example...because I am not SO honest that I am prepared to quote my actual losses for all to read!!

If my total losses in dollar terms was 40 grand, 32 grand would be on trades where I held and "hoped" for a recovery. Only 8 grand was lost by exiting the trade quickly when it went bad.

I don't have the exact ratio of trades (I could easily enough go and tally it up) - but I hope people can get the idea of what I'm saying. I am losing 4 times as much money by holding as I would be if I used stop losses and exited.

It adds a lot of weight to the saying about how you will go broke way faster holding onto losing positions than you ever will exiting for a small loss and finding another trade.

Sorry - long post. I do hope it helps others.

I am still struggling to jettison some losing positions but after running the numbers and seeing the above it makes me see that having money in my trading account is far more useful to me and offers much greater potential than leaving it in day trades that have turned into short term trades that are then medium to long term investments, and all the while they are millstones around my neck that are choking me and eroding my trading capital FAR quicker than a poorly timed day trade with a stop loss EVER could have.

Have a great weekend.