Having recently seen markets at all time highs, there is always going to be room for downward movement. This is just the way of things. My own account reached a recent new high on Monday as well so taking a decline here should also not be unexpected.
But it’s always disappointing when your profits go down. Of course it is, that’s natural. But do I care?
Oh dear, it’s that yes and no answer again.
Thing is, trading IS emotional as the desire for gains is the reason to trade, and losing profits hurts. But, you have only to look at ANY chart and see that even on a good run, there will be down (red) days. You CAN’T expect trading to be all “green” days.
One way of administering pain relief on these days is to look at many stocks across the market to see how your own holdings play against others. And, if all your positions end in the red, you want to see many other markets also in the red. That makes you feel better. It isn’t just you who’s losing out, everyone is. Group therapy.
So when do you know if your recent “HIGH” really was the top and you should be pulling out of a position? Answer: You don’t. You can’t. So you have to just ride the rollercoaster and see where it takes you. You can of course use Technical indicators to choose your exit points, this takes the emotion out of your decision-making.
So, is a disappointing day a problem?
Absolutely not. If it is, you are missing the point! Every day is different and also unpredictable. It’s just nicer when it all goes in the direction you need. Those trades that consistently move against you should, if you are trading correctly, stop out. Only by letting the good ones run, despite disappointing days, will you gain over time. Nine out of my twelve current Spread Betting positions are profitable right now, one of the losing ones is only off by 18p!!
Disappointing is easy – it’s the disastrous days I don’t like…
Love as ever,