Discipline Trading: Holding onto winners

[Fxtrader06 10]

I wanted to discuss an area where I am struggling psychologically. I consider myself to be fairly discipline when following my rules for my trading setups. However, I have a tendency to cut my winners a little too early. I identify key support and resistance levels prior the the open. When prices are test these areas, I have a tendency to exit my position. Sometimes this is the correct move, sometimes prices will break the line of support/resistance and I leave alot of money which I should of made.

 

This is one rule I keep breaking over and over. Do you think it has something to do with my internal beliefs on money? Or is it a lack of discpline?

[Soultrader 12]

I totally understand you problem. I had a similar problem when first starting out in the futures markets. I didnt mind taking losses but what got to me the most was watching what could of been profits. I think that hurt me more than anything.

 

One way I managed to fix this problem was setting new rules for scaling out of trades. I never scale into a trade when day trading but now I always scale out. My current rules are as follows: scale out half at +10, quarter at +20, and last quarter using smart stops.

 

This way I am able to catch a good move using a quarter position. After taking my profits on the first half and quarter, I just place my stop for the last quarter at break even and leave it alone for a while. I think once you get into the habit of ringing the register and leaving no risk, you are able to sit back and relax and watch a trade do its thing.