Willing to change
Have you ever entered a trade and it goes completely against you? Who haven’t you’re asking. So what do you do? Once you enter a trade you should first put that “holy shit” stop loss, you know what I’m referring to, when a stock pops or pulls and you’re sitting there going “holy shit”, now this wide stop will prevent you from wrecking your account. This is the stop that you put in place before you do anything, before you tweet, before you share in chat before you type one more key. Just in case. So you put the stop and it gets hit, you’re stopped out. Now what do you do? First asses the damage, you should already know how much you loss even without looking at your P/L. Why? because you knew as soon as you entered this trade what your maximum loss was and what was your target exit. You entered this trade because of what reason? chasing? read it on twitter? boredom trade? overtrading?. If you planned out this trade properly, and it goes against you suddenly then it’s hit a resistance or support and now your current trend is broken. Instead of freaking, you have to be able to think within a millisecond based on what you know at hand if you should take another position the other way. Now in most cases this works, does it work all the time? of course not.
This is where studying the charts can alter how you trade. If for instance the night before you did some HW and knew that let’s say $20 was the support for a particular security going long that you’re eyeing. So $20 hits and you take the trade, the stock goes to $19 and you’re stopped out, that previous support becomes resistance. So you jump in short? Nope!, this is how you’re gonna get wrecked, you wait for it to retest that $20 area, then you make ur call, long or short. Being able to change either long or short biased on the dime will make you a more efficient trader.
This is how I look at it, because a lot of traders are short biased or long biased. No matter how you play it all green if you master the art. Should you be short biased or long biased? Bull or Bear? I say you have to be able to adapt in a sec or you will lose. If I gave you a coin heads up, does it change the value if I gave it to you tails up? NO, so if you’re long or short, does it change the value you take home? NO. But you have to be “willing to change” in an instant.
I hope this have helped you some. And as always, if you would like to see me use these tools to help you execute a trade join me at awesomecalls.com, thank you.