Broad Market Outlook
Just closed out my worst swing trade in years, locking in a nearly 20% loss in a matter of a few days. From what looked to be a promising base breakout that quickly turned into a dumpster fire in a snap.
With mostly all failed trades, often the question we ask ourselves is "why did I not sell that (insert expletive) sooner?"
As traders we battle with should I sticking to the game plan or should I tweak it?
The game plan was to give it the proper room vs major support and let me tell you, that plan worked to an absolute tee.
This has not been the first time I have been down that much in a name in, and given my many laps around the block I have been able to work my way out of most positions for a gain in time.
Yet this was a fight where time was not on my side as I was losing too quickly from the start and was easier to simple take the hard lump and move on.
Given how this 20% loss could easily spiral into a 50% loss just as quickly as it became a 20% loss.
Now as annoyed as I am at this particular loss, its funny how losses feel so much worse then the joys of our winners.
My SNAP position is more then 20 times the size of the RCKT trade, yet that loss still stings more then the bigger winner gaining 20% in price in the same span.
After reviewing this trade and looking back through my journal and see hundreds of other failed trades with sub 1% losses, I am reminded why getting out of losing trades sooner then later in most cases is often the easier move.
As much as we want to make our trading systematic, we want to be as systematic with our winners, while being as open minded as possible to cut the losers sooner then later.
The goal will be to make it another 2 years before I have to see a failed trade at this percentage loss again and I hope the same holds true for you as well.
Just remember if your losing 1-5% in your failed trades realize that your worst losses are the average traders losses they could only hope for.
From Ben G
Macro Rotation Outlook