what to do when your trading goes to crap!

[CatFish]

it happens to all of us sometimes we get into a slump and everything we buy goes to crap. here is what i do and others please contribute to this thread. i do not care who you are we all have times this happens lol.
1> stop trading and take a little break. few days away from the computer and the market
2> after that break start studying looking at what you may have done wrong so as to correct it.
3>paper trade like a madman. greencat and i paper trade all the time and so do most succesful traders. trading stocks is an art, and a sport and practice is the key and paper trading is free. it will teach you to see things quicker and make you a better trader.
4> get your confidence back and start making money.
5> the reason we ussually loose is 2 reasons. greed and emotions which go hand in hand. take a profit. you take 10 10% profits and that is 100% profit. think about it. HOW MANY TIMES HAVE YOU HAD A 10% PROFIT AND DID NOT TAKE IT JUST TO END UP WITH A LOOSING TRADE! we are all quilty of this.
6> remember playing the market is a buisness. you need tools to run a buisness properly no matter what it is. think about trying alpha trade. it is free for 14days. i have lots of watch lists and one of them is stocks that move on news. with alpha trade i get an alert the second news comes out on the stocks on the list and that can be quite profitable for a quick trade and pay for the service for years to come like it has for aufan and others. it is all profit after that. L2 needs no explanation. you will feel naked without it once you try it. kinda like a powered hammer for building something and having to go back to pounding nails. power hammer is worth the investment.

okay lets talk about the good times. you are hot and everything turns to gold!
1> keep some of them profits. i have a set amount that i keep my account at and i get past that i take a payday. that does 2 things. it keeps me from blowing it all and gives me fun money for toys. we are all doing this for one reason to make some money. agian thier is no such thing as a bad profit and i tell you what folks the first time you take money out of your account that is profit it is a feeling you will never forget. with me the money in my account is like monopoloy money it comes and goes. when i take profit out and get them greenbacks in my hand that is what it is all about:D

[phatphingah]

All great advice. Especially the 'paper trade like a madman'.

Something that took me a couple of times to learn - this may better fit into a 'what to do before' thread:

Don't rush into a stock. Say you're running late for something, don't neglect doing the proper DD so that you can get the stock order in before you need to leave. You're adding needless risk to the trade which could easily come back and bite you. Just treat it like a paper trade -- if you were right, take satisfaction in knowing you were right-- if you were wrong, be glad you didn't rush into it-- win-win situation. :D

[BadThad]

Welcome to the forums! :D

I like your advice about rushing into a trade. Doesn't matter if your fundemental or technical.....do your DD. I lost my arse in the early years by jumping in only to realized I bought at or near the high of a big play....just plain stupid.

[Tau44]

how do you go about paper trading? do you have a form you keep on each stock? i would like any info on this and the best way you find on paper trading. i guess can you give us a paper trading 101. i know this sounds silly but i think it would be a good thing to learn exactly how the pros do it.

thanks,

Tau

[greencat]

Catfish really great advise. One thing We should also to do is go back and review our trades and see where we made our mistakes. Another thing I like to advise when a trader is fustrated is to study charts like a mad man and then re enter stock trading and force themselves to take profit at 10% or 20%.

Not only is it a confidense booster but it also firmly teaches not all stocks are going to make that big run. Of course in penny stocks we sometime have to break out the guesssing game but even then we have to stick to our set of rules.

Emotions will cause us to make bad decesions and the number 1 reason people lose their stake is holding on to a losing stock to long. It also why we try to reinforce to idea there is no such thing as a bad profit. I myself have left stocks to soon to watch them rebound and go back to the high or higher.

Years of trading has taught me to ignore it be happy with my profit and move on to the next one. It also has taught to keep an eye on a big mover and look for the bounce play.

Penny stocks to me are like a sneeze and a hick-up. Many may a half hearted attempt and become a hiccup others are like a good sneeze, it builds and buuilds and the bam it flys and then its over.

And it aint profit till you sell it!!!!

[BadThad]

I can't over-emphasize taking a 10-20% profit. It the biggest mistake I've made over and over in trading. Fall in love with a stock and simply hold it far too long.....arrrggggg.....I've lost thousands of dollars. It takes a lot of work to make that up!