Comments on: Good Trades vs. Good Results http://www.thestockbandit.net/2008/04/22/good-trades-vs-good-results/ Trading blog with trading insights, discussion on swing trading, day trading, and trading psychology. Fri, 16 May 2008 10:34:40 +0000 http://wordpress.org/?v=2.0.9 by: TheStockBandit http://www.thestockbandit.net/2008/04/22/good-trades-vs-good-results/#comment-71438 Tue, 06 May 2008 19:52:14 +0000 http://www.thestockbandit.net/2008/04/22/good-trades-vs-good-results/#comment-71438 TSR, thanks for your comments here, you've shared some good ideas. I think it just boils down to not only following your own trading method, but keeping tabs on those "what if" trades that you consider along the way. That's probably the best way to incorporate new strategies into one's method. Good stuff! Jeff TSR, thanks for your comments here, you’ve shared some good ideas. I think it just boils down to not only following your own trading method, but keeping tabs on those “what if” trades that you consider along the way. That’s probably the best way to incorporate new strategies into one’s method. Good stuff!

Jeff

]]> by: Trading System Reviews http://www.thestockbandit.net/2008/04/22/good-trades-vs-good-results/#comment-71435 Tue, 06 May 2008 19:48:52 +0000 http://www.thestockbandit.net/2008/04/22/good-trades-vs-good-results/#comment-71435 When I first started out I had huge problem with the psychological elements of this. I had read all about the mechanics of making a trade and it all made sense - you spot what you are looking for and you get into the trade understanding the size of your position, your exit criteria etc and it is all perfect as you enter. You make the trade and it loses you money, nothing much but it loses. Now the same stock turns round and once again the set-up is perfect, you enter the trade and once again you lose money. Then once again the set-up is right and you think 'nah' and look elsewhere for your next trade. I did this for a while before I read about the psychological effects of losers being larger than those of gains (which is why low hit rate/high return strategies are the hardest to trade effectively) From then on I started keeping a record of the trades I didn't make and the reasons why. I looked back after a year and it became obvious I lost a huge amount by not being tough enough as there were some trades that bombed me out several times before flying off into a huge overall gain - in fact I still get the urge to kick myself when I see an Abercrombie and Fitch store after I figured out how much money I lost by not taking a trade on them in 2000 which was when I went through this process! So the point I am trying to make in my ponderous way, is that what you don't do is just as important as what you actually do in trading, whether this is actually taking the trade or what you do during the trade, such as not letting a position run or not taking your losses. When I first started out I had huge problem with the psychological elements of this. I had read all about the mechanics of making a trade and it all made sense - you spot what you are looking for and you get into the trade understanding the size of your position, your exit criteria etc and it is all perfect as you enter. You make the trade and it loses you money, nothing much but it loses. Now the same stock turns round and once again the set-up is perfect, you enter the trade and once again you lose money. Then once again the set-up is right and you think ‘nah’ and look elsewhere for your next trade.
I did this for a while before I read about the psychological effects of losers being larger than those of gains (which is why low hit rate/high return strategies are the hardest to trade effectively) From then on I started keeping a record of the trades I didn’t make and the reasons why. I looked back after a year and it became obvious I lost a huge amount by not being tough enough as there were some trades that bombed me out several times before flying off into a huge overall gain - in fact I still get the urge to kick myself when I see an Abercrombie and Fitch store after I figured out how much money I lost by not taking a trade on them in 2000 which was when I went through this process!
So the point I am trying to make in my ponderous way, is that what you don’t do is just as important as what you actually do in trading, whether this is actually taking the trade or what you do during the trade, such as not letting a position run or not taking your losses.

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