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Biotech / Medical : Arena Pharmaceuticals (ARNA)
ARNA 99.990.0%Mar 15 5:00 PM EST
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To: Justinfo who wrote (2215)2/20/2014 12:24:19 PM
From: The Ox1 Recommendation

Recommended By
Justinfo

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The next "hard part" to "get over" is when you take a small loss and the position immediately turns around and "appears" to fulfill your original trading plan. This can happen fairly often.

The key to overcoming this one is much easier than dealing with the psychology of taking a loss, IMO. Just realize that your plan didn't work out as you liked, that's why you stopped out. Period. End of the second guessing.

In essence, (the thinking goes like this...) you either jumped the gun and got in too early or your stop was too tight and you didn't give the position a fighting change. Either way (and it doesn't matter except to learn from the action), the key is that you misjudged something. Maybe you didn't misjudge anything and it's just that the market shook you out. It has a knack of doing this to even the most seasoned of traders.

Once again, use these situations to learn and/or adapt. Was it a dollar amount that you reached which trigger the stop out? Was it a line in the chart where you said "that's as far as I will let this trade go"?

Many times when I'm evaluating my trading history, the reviews don't seem nearly as bad later on down the road. Often, the initial disappointment clouds the thinking. Days or weeks later (even hours), it may be clear that the choices you made were within your normal trading patterns and you simply were protecting your downside.

Anyway..... all of the last few posts are things I try to deal with to keep as much emotion out of the process as possible. Understand and review but never "dwell on it". Way too many other things need to get done and "stewing" on losses is about the biggest waste of time there is!!!
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