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[quote][i]Originally posted by Paul_J[/i] [quote][i]Originally posted by Dan[/i] Taking a decision on when to cut losses and when to take profit is something I don't get yet. Any pointers Paul? Bearing in mind we are day trading I would assume its classed as? I can see these Nokia shares proper killing me. Preying for a recovery when the market opens lol [/quote] I used to trade Forex daily (occasionally letting it roll over), I learnt technical analysis, indicators, basic patterns etc - but the problem with technical analysis is that it's about looking at what has happened and trying to predict based on that, what will happen. Unfortunately, the market is often doing a 'random walk' and it's hard to predict what it will do, so either you follow technical analysis and it completely goes the other way, or you follow it and because everyone else is looking for the same thing and it does move as expected... It was only after watching the charts every day, that I got a feeling of exactly where it was going and could start predicting a bit better. Even so, you still get it wrong and the market changes - what would work in a volatile market doesn't work in a stable one and visa versa. I made some quick money and it was fun, but I had to stop doing it for 2 reasons, 1 ) it sometimes felt a bit too close to gambling and I was staking more than I should to sometimes gain very little and 2 ) It literally consumed my time / life. I couldn't stop watching the charts, especially when I had open positions - therefore I was unable to do my job and there was a period where I was sitting at work with charts on my 2nd screen, trading app on my phone and I was getting caught out by my colleagues / bosses watching the charts / making trades instead of working. Infact, one time I got interrupted when I was expecting the market to shift and I needed to close a position, but I couldn't do it while this colleague was talking to me, I was itching to check my phone... by the time he stopped talking to me I had lost a bit - I wanted to punch the guy in the face haha :lol: You'll notice you can make more money easily on the play money games online than real money trading. This solely comes down to your emotional influence on decisions. Equally, you could argue that a lot of it is luck, I may make $50,000 randomly trading and you may lose $50,000 randomly trading... then a year later we may reverse with me losing and you gaining. That said, from what I know, the consistently profitable day traders generally decide on a system and they stick to it, ignoring emotions. They place their limits and stops based on what they believe their system will predict and if it goes against what they expected, they cut their losses small and let their profits run. I read once that a good bank roll / risk management would be to expect to make money on 1 in every 3 trades, but expect to make at least 3 times the amount risked per 'winning trade'. Thus, you may be wrong more often, but when you're right you make more than your original cost = profit. (this is the opposite of how most rookies trade). One day trader I know, basis his system on bogus press statements. If he see's some press that he believes is garbage and the stock price goes up, he shorts their stock on the expectation the price will come down after the hype has settled. Other trading strategies may include looking for pairs of stocks that trade in a synchronous pattern, moving together in parallel (the effectors on one is the same as the other), if one of them suddenly changes drastically, you would expect it to return to the original pattern and thus you can trade the difference as it goes back to where you'd expect it to be. Loads of forums / things online... to be honest, most of the books people really recommend are based on emotions / strategy / risk / bank roll management. You won't find a 'system' you can just apply - even if you did find one, it would be dependant on how the market is currently moving. [/quote]
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