Wednesday, September 06, 2006

August Performance Review: Micro-Managing Trades

I just completed my August trading review and I'm not as happy as I was pre-review. While I did post a decent 9 percent gain, a common trading flaw became apparent that kept me from having a huge month: micro-managing trades and pulling out before my stops were hit.

I pulled out of 8 trades before hitting my predetermined stop, and 7 of them never hit the stop and would have given me decent sized gains. I need to remember why I placed the stops where I did in the first place (usually just under support/resistance/price-volume bars) and stick with the trade, no matter how many other opportunities I see while waiting. My biggest problem is that the grass always seems to be greener on the other side of the fence. I see all these setups on my watchlist and become impatient with my own trade. This certainly is not a recipe for success, so I need to do a better job of keeping my emotions in check.

So my goal for September is to allow my trades to work for me and not micro-manage them. I may even take the drastic measure of only checking my trades and watchlists 3 times per day, at the open, noon and close. Wish me luck, I'm gonna need it!

Note: I firmly believe that psychological development is one of the most crucial aspects to trading. I highly recommend Brett Steenbarger's website, which is the most comprehensive trading site that I know of.

Tags: TraderFeed, Steenbarger, stops

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