....everything has an art
- Jun 10, 2007
PeterEvery trader suffers from this problem until they make plans and then apply those plans to minimise the emotional impact. It's very hard to stick to a trading plan until you understand yourself. The plans you make should suit your personality and risk tolerance.
I'm a short term trader. If my initial risk is 10% then I'm happy to grab 15-25% in a short time. I'll use a profit target or a trailing stop that tightens as the profit gets larger. I'm not going to get most of the move but I'll get lots of little bits as the swing or trend unfolds.
You manage every trade according to your trading plans. Your plan for every market, eg XAUUSD, must allow for the average price movement (volatility) in the time frame you're trading. If you use a trailing stop on a daily chart then you've got to allow price to move the average daily amount. Gold can move a lot in a session and this makes it difficult to use a trailing stop on an intraday chart.
The fish analogy was for ALL lengths of trade, day, month, cycle, long term.Although I posted here I am not day trading but I like Gold ATM.
I generally trade in lots of 10,000 shares no real reason but it also makes the trading cost irreverent. So 10% is good. But selling has proven a challenge of late.
Up until late I have been firm but of late I have broken my rules to my own detriment.