I am selling way too soon. To make big money in trading, it is important to let the winners run. This means not raising the stops or taking profts before they have a chance to run.
Earlier this week, I read the following at TraderMikes' site:
"The biggest problem I had was getting out of winning trades too soon. I always like to push my stops up to break-even when I can but my journal was screaming at me that I was adjusting my stops too aggressively. I kept getting stopped out of stocks that would have been big winners for me. What I noticed was that those stocks would typically have strong moves in less than 30 minutes or so and I'd push my stop up only to get stopped out and then the stock would turn again. So I made a rule that I can't touch my stops until at least 60 minutes after entry. It was one week after I made that change that I had my biggest day in years. And I haven't had the 'stopped out too soon' problem since."
It's refreshing to know that even great traders like Mike have had this same problem. I think his idea of waiting at least 60 minutes before adjusting stops is a good one. It will mean that my win ratio may decrease, but my earnings should increase. I tried this on my AMZN trade earlier this week, and it worked well. It won’t work as well for every trade, but it will allow me to stay in the winners longer.
I also traded FWLT for a small gain at the end of the day, but nothing major.
Have a good weekend.
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