Stuck in Bad trade(s)

Hi all. I thought I will start this thread as most of us have been stuck in bad trades at one point or another and pondered what to do. Of course one should always have a stop etc but things happen. Here are a few instances where we might be in bad trades and if someone can add we could perhaps make a sticky and help those who need some instant help.

 

1. No stop
2. Platform freeze during trade set up and large movement occurs in that time
3. Trying to hedge without planning and closing one position too early
4. Having a good trade originally, we don't take profits, don't set a trailing stop for any reason but something happeed in the market and overnight we find ourselves in a mess.
5. Keep hedging till we are near margin call
6. Simply a bad trade and reading too many forecasts with conflicting oppinions and chase the market till we risk losing everything, so we keep the trade.

There are many more, but basically it would be nice if some experienced traders could offer some constructive help.

No need to say that I have had all of the above in my 8 years of trading and even now I catch myself in bad hedges sometimes, luckilly more money tha in 2002 to sustain the wait. We are all learning all the time.

I just get out. What's the point.

Took a while , but these days, the minute I say "this is a stupid trade", I get out.

Stupid being... badly managed... badly entered... badly chosen... badly sized... screwed up exit orders ....or anything of the such.


Edit: I have to add.... I won't even look for a reason to justify staying in any more before exiting. If you do, you wait too long, or talk yourself into further losses to try to hope for "rectification of your dumb mistake". (we've ALL been there)
.

I guess many of us got stuck in bad trades this past couple of days.Of course it depends if it is $ pair of cross. Still it is something we all have to deal with and there must be strategies people use. Yes hedges sometimes work but not all the time.

I guess last week was the worst moment to start trading on the real side. I was all faced bearish and made almost all of the described mistakes above How petty I am...

I'm also faced in -400pips and less for just a 3 days - a complete losing situation. And now my balance is so small that I'm wonderring what to do. Do you think I have to close all my losing positions or is it better to wait for a while until market got reversal so I exit at less losing position?

Bro's..i hav seen thread b/4,but i must say this is thread of all thread..wow!!great one guyz..will sure drop by frequently and see how i can help out,and always state the full condition's of your bad trades..best of luck trading...

I've only had one disasterous trade-- mistakenly put in a 140 pip stop instead of a 40 pip stop, and I caught it at about 110 pips down. Closed it immediately, walked away from trading for the day to cool off, as I was quite upset at myself for making such a careless and costly mistake. If you are caught in one of these situations, my advice is to eat the loss immediately and write it off, and most importantly learn from it so you will not make that mistake again.

Most important - this is a business - so risk needs to be assessed honestly and then managed. Risk should be kept very low. Live to fight another day.

No Stop:

Do not ever do that. Ever.

Platform freeze

You have stops in place. Fire up your backup PC. No backup? Why are you trading? See note about this being business.

Trying to hedge without planning and closing one position too early

I'll leave this one alone - I've never met a retail trader who could pull it off. But my view is limited, I don't know enough people to judge. Seems like a hard way to make money.

Having a good trade originally, we don't take profits, don't set a trailing stop for any reason but something happeed in the market and overnight we find ourselves in a mess.

This happens, but sleeping away without a profit protecting stop in place is poor form. Use good Take Profits too. The market can reverse before they are hit, it happens. Stops Losses are critical. Never trade without them. They are faithful employees

Keep hedging till we are near margin call

If that is a problem we are not equipped to be in this business. Not at all. Know when you are going to get out and do it. Forget hedging.

Simply a bad trade and reading too many forecasts with conflicting oppinions and chase the market till we risk losing everything, so we keep the trade.

Stop reading others opinions. Only you are pulling the trigger, so do your analysis and own the result. Set and keep stop losses. Manage Risk. This is a business.

You know, this was a tough thing to read. None of this has to happen. I know that this is the only occupation in the world where people jump in and think that they can have success in a few months and little education.

The desire for riches is very strong and causes even the strongest man to do insane things. You can get very wealthy in the markets - but those that do, and REALLY GOOD at what they do. Fly by nights sometimes make a killing, but they all hand it right back.

What a wonderful post. Thanks for taking the time.

But it is one of those things, you can tell a child not to touch a lightbulb and since lightbulb existed there will always be a new child who will want to touch it....

Unfortunately grown ups do this too. We don't learn from others as if we did, a child of an alcoholic would never drink as he/she knows what may happen. But they think :"Not me, I am in control".

I think same with trading. Trading is a challenge to some of us, not only a path to riches. A challenge to be the best, to find that great "system" to make money not just for sake of making money but to "prove" we can do it. All the advice of capital preservation and basically making sure we stay in the market and not get that margin call, all that advice doesn't help to most people.

And so we will always have people who, for whatever reason, make mistakes. We all do even after long time in trading. Last week was an example of that. I know many ex-floor traders who lost and lost again. I, personally was stuck in a cross trade which thankfully didn't take my stop out but closed in some profit on that gbp news.

So I hope we can offer some concrete advice on this thread to people who are suffering and remember the times when we were there.

Sorry to hear that Dex. Can you tell us exactly what your trades are, entry point etc. so perhaps someone can give you focused thoughts. And don't think you were petty, we have all been there and worst I am sure. But not everyone admits it.

Very True. So, what do we do to avoid a burn that leaves a scar? Demo trade until you can be successful for at least 3 or 4 months. Keep your risk very small when you go live. (Under 1%). Once your gain real confidence, expand your risk to 1%. Learn to take only the very best trades.

No one can say "I am under control" until the track record exists. Been there, done that. There are reasons the vast majority fail at this. You touched on part of the reason

.

.

Trading is indeed a challenge - but the challenge is internal. Since we have no control over the market, the challenge is control of our own thinking, emotions and beliefs. I believe many people say that they are doing it for the challenge, when what they really mean is that they do it for is the thrill.

Mistakes are going to be a feature of our lives. Cannot get around it. Minimization of them is what I strive for. Last week was a slow week and many looked to make something up to trade - and lost. Self control is the hard commodity.

Concrete advice for those who wish to learn

1 Find a mentor. This is a big big help.
2 Pay attention to the successful traders here. It will take a long time to discern who they are.
3 Take your time. This is a hard road. Time is on your side - use it.
4 Learn Price Action, and learn it very well. You can actually use only this and be a consistent winner!
5 Demo trade until you are consistently profitable at least 3 months - and I recommend 6 to 12. Period.
6 Keep risk small
7 Stick to the best setups. You will only get a few a month on the daily, but that is OK. Your account will grow.
8 Focus on the process of trading well - not the 'money I could make'
9 Find out everything you can about the Psychology of successful Trading. Start with Van Tharp.

That is a good start. There is more. Take your time. Turn this into an real education and you will find success. No one has to fail at this, but it is not like putting a key into the ignition and turning it on. This is a business, and there are plenty of people out there who will, without any conscience about it, take your money right out of your pocket until you are bled dry.

Spending time seeking learning Systems simply sets you up for failure - here is why I say this.

When you get a system, what are you saying? You are saying that success comes from another source - "The System" and all you need to do is follow it. There are some systems that work, but they are far and few between, and those few people who actually benefit from them have taken the time to understand the bedrock principles of Price and how the market works. Systems seekers do not do this, and hence never follow the systems or understand what they are doing.

I totally agree on "The System" statement. Whoever has been around long enough knows that people have on "system" one day and the other they discover another great "system" and so on. It is truly amazing how people earn money on selling "systems" and there are always buyers...All is good if it is free and this is all part of education. No need to spend money on "systems".

IMHO, our main problem is discipline and emotion. Even greed can be scaled down if we could control the emotion. It is amazing how many people will say :"I don't care about the data, trade what you see". But we have to care about it UNLESS one doesn trade prior to important data, which is fine. Go back to techs after market stabilised.

This last week was a perfect example, especially Thursday/Friday. How many new and old traders were colling tops, bottoms and inbetween on every minor and major R? And yes we het a bit movement but still we push on. So one can not follow :"the system" which has no flexibility and does not allow for market emotion and general dynamic at the time. And no system can do this right now.

Maybe my little boy "when he is a scientist and invents a perfect pokemon world" can also do something for us!!! Give us a perfect "system".

GO BACK AND READ HIS ENTIRE ANSWER!!!!!!
BINGO!! take this one to the bank!
Jesus.....read this one about 20 times guys......NICE POST!!!! want to stay out of bad trades??? trade medium to long term, learn where to place stops, NEVER risk more than 2-2.5% of your account on a trade. LEARN that 3-5% return a month is fantastic and will place you among the forex elite.....as soon as you get over the "double your money in 3 months" BS you have a chance to be a trader, instead of a demo account thrill seeker...... I would not doubt storage pro is a profitable trader...or at least well on his way......congrats man......