Jul 23, 2007

How I limit my losses

Didn't see a lot of great setups for me, but I did like DCI and decided to enter. However, I didn't like how things were going and decided to start limiting my losses where it made sense to me. Click on the chart for more detail:
 

 
In hindsight, I should've just kept all my shares and exited at the same exact spot since my stop was never hit. In that case, I would've only lost .07R instead of .17. But, sometimes it's hard to make the perfect call in the middle of the trade.

5 comments:

Flatwallet said...

Today was a pretty crappy day. Not even the any size Micky Dee's .74 cent coffee would have done the trick.

JerryC said...

Limit loss is a must do as you never know what the stock will do next.

Bigfish said...

Tomorrow is another day! You will "kill" the trade! I've had my share of those types of trades lately. Better luck to you for tomorrow!
Bigfish

Anonymous said...

I traded:
ODFL 15 minutes 4th bar, classic X setup.
FOXH 5 minutes 14th bar

I just moved to a new place over the weekend, guess stock god saw it. :)

OONR7: I had same feeling as you couple days ago, I was trying to move my stop to breakeven after it move up to at least not loss money..
but lots of time I was stopped out quickly, I even feel MM can see my stop order and later on realize my size is not worth such a big move.

-DT

OONR7 said...

All: I practice this kind of limit loss technique all the time. Helps to keep the loss low while still keeping me in the trade until a valid stop signal is issued. This is the difference between the OONR7 of today and OONR7 of last year. And yes, the beauty is that tomorrow is indeed another day where I can make a good deal of money. So, essential to keep my capital in a trade that obviously was not really a big mover.