Letting Go bad trade ? NEVER !!!

It was only negative 40 pip before i realize the pair going down, instead of changing direction, I hold tight to 450 loss :surprised .... waiting for it to comeback..bracing my self for even 1000 pip .......... ALL for only 40 pip.....

How much more intolerant I can be...

In all my good trade, I take profit prematurely
while the bad trade I hold tight.... Not so good for me.

What can I do to brace myself to letgo the bad trade ?
& let my winning trade mature before taking profit from it?

I humbly ask your guidance and assistance

Decide on a maximum number of pips against you to decide you were wrong, then exit that trade at that point. Period, no ifs, ands or buts.

Lets say you've decided that 40 pips is your number. Once a trade moves 40 pips against you from the highest point (for a long), then exit the trade, and go look for another good setup.

It may be that the trade moves against you starting at the entry. In this case, accept your 40 pip loss and move on.

It may be that your trade moved 20 pips into profit and then moved 40 pips against you from there. Take your 20 pip loss and move on.

It may be that the trade moved 200 pips in your favor and then moved 40 pips against you. Take your 160 pips profit and move on.

YOU must have the discipline to follow your exit rules. No one else can do it for you. I recommend you read Mark Douglas' "Trading in the Zone" for help with this issue.

Dial

I uploaded a good booklet in this thread called Emotion Free Trading, I think it is worth reading.

http://www.forexfactory.com/showthread.php?t=4073

1. Make small trades so that if the worst-case scenario pans out (your stop loss gets triggered) you only lose a very small % of your account (about 1% is good for new traders). You can easily make these calculations by FIRST finding a suitable stop loss level based on TECHNICAL ANALYSIS, then calculating how many pips that is from your entry, the value of each pip, and then from that calculating the size of your position so that if your stop loss orders gets filled, you will only lose 1% of your account. This will take a lot of the nerves/emotions out of your trades, which is the main reason people let their losses run. When only 1% of your account is at stake, you can bear the loss easily and go on trading without much emotional attachment. It is generally good practice to manage your account in this way and move on to even smarter money management methods as you gain experience.

2. Much like dial's post, you can trail your stop loss so that once you are in profit by a bit, you start to cut your risk more and more, and eventually even move your stop loss to a break-even or minimum profit level. I prefer to do this by using TECHNICAL ANALYSIS so that when price breaks certain technical levels in the direction of my trade, I move the stop loss to just beyond the next significant technical level. This differs from dial's method in that the # of pips is not constant, but varies according to tech levels.

3. When you are tempted to take profit early on in a trade, do so only on a fraction of the position. That way you can lock in some profits making you feel more secure, but at the same time you can let a part of your position run to catch even higher profits.

Hope that helps.

last time. I did have emotional problem,
which was solved mostly by help from you guys here.
http://www.forexfactory.com/showthread.php?t=43947

This time, I was not afraid of the loss, But rather I don't want to make it a loss in the statement.

I made precise calculation of how much negative PIPS i can withstand, then I brace myself for it..... Instead of changing direction ( which could have made me 200-400 pip easily ) at GBP JPY ~12 hour ago.

It goes down, I just smile..... and buy and buy more and more...... compounding, to reduce the pip requirement to break even.......

I do get away with 10 pip profit at last, but in reality I loss, because I didn't want to take the initial loss......

What bothers me now is,
why i choose to withstand 400 pip negative instead of profiting from it ?

Why I cut my profit and let my loss run........ this is an issue to be dealt with.

Try reading what I put up here: http://www.forexfactory.com/showthread.php?t=44193
It's all good for people to tell you to be disciplined but as critical as discipline is, it won't get you anywhere until you start thinking differently.

There is a method that Gann used to get past this problem. It is not anything new or special. It does work well however.

When you know the trend;

1 Only place trades in the direction of the trend.

2 For a re-entry back into the market, wait for a retracement of 3 bars. That is, if the trend is up, wait for the market to make 3 lower highs and 3 lower lows. Then on the next bar, enter the market at the high of the 3rd bar down, plus 1 pip/tick. If you do not get an entry, because the market moves down another bar, just continue to look at the last 3 bars of lower highs and lower lows and simply adjust your entry down with each new lower bar until you get a fill.

3 Place your SL 1 pip/ tick below the low of the 3rd bar.

4. If the bar you entered on closes below the open for that bar, close your trade immediately, other wise stay with the long.

5. To exit the trade in profit, count back from the highest 3 bars, with lower lows. That is where you place your Trailing stop. So as the price advances, you keep moving your stop up, 3 lows back, until the market takes you out.

6. If the trend is still intact, just wait for the re-entry setup to happen and jump back in and do the entire sequence again.



For a Short position, the rules are exactly opposite.

This method will always force you to leave a bad trade quickly and to let the profit run