Confidence – one of the most important points in trading. When you are confident in your actions, you easily accept mistakes and your successes are even easier.. As a rule, confidence disappears with a large number of negative days and trades.. There are simple rules to restore confidence.. First, you need to analyze your trades for a bad period. (for that, in order not to count hundreds of trades, it is better not to delay with this) and understand the essence of the problem or you are always wrong with the direction, either you don’t believe in your trades and don’t let your profits grow, or you trade stocks without potential. What the analysis should represent: your entry price and directions, how much the price moved against you after entering and how much in your direction.
Let's look at these three situations separately..
1) In most trades, you would lose the same amount in position as you earned, i.e.. risk / reward on them with your entry point is 1/1 and hovers around 25 Cents. This means, that shares, which you choose do not have decent potential for intraday trading. And also your entry point is NOT CORRECT. Now how to find those from these facts, which will build confidence and guide you where to go next. With such deals, you can earn? No, because you also need to beat off the commission and I would like to be in the black every week and month, and the required number of trades may not happen within a week or a month, because. we only know that with several hundred trades this system will be positive. So something needs to be improved. Choosing a promotion? This is a very difficult skill., whose development requires more than one year. We need to work on it, but it will not bring immediate benefits, but in the future dates you have an advantage in the market. Improve entry point? this skill develops much faster. first, you need to determine what signals you usually use and what signals in your past trades would provide the best entry point, say on 10 Cents. When you've done it all, what you have to do is track them and trade. Will the new system be profitable even with a small number of trades?. Yes, since we will use slightly different signals to enter, which will help raise the risk / reward to 1/3. And already with a winning 35-40% we will be in the black. And the development of the skill of stock selection will help us to further improve the trading system over time.. won't such a view of things and the future raise your confidence and give more courage and audacity to your trades.
There are two more situations: when you are fundamentally wrong with the direction and vice versa, but don't let the profits grow. I suggest you sort these situations out for yourself.. Just give two pieces of advice: you may be right with your thoughts on direction and market and stock, but doing this is untimely and the problem of cutting your profits cannot be solved with correct stops or trail stops. At first I had such a case: a friend was expecting growth in the market, when he stood at the base for several weeks and bought every day, counting on him, as a result, all this time he was in the red, I told him, that to exit the base you need a lever and they will have important news on the real estate market. On the second: it is impossible to fit a stop to each position, there is no average in each position, it should be like the first time, therefore it is better to work on signals to exit the position. Thanks to clear signals in position, which you just have to wait, you get the best price to enter no more than 20 cents from the best and the exit price will be perfect. Having developed such a skill, you will be surprised to notice sometimes, that you sell stack at high or buy at low.
Happy trades. and don't forget Trading is hard work, which is rewarded quite passably =)))
