How to Deal with Seller’s Remorse
Every, single, day. I chart at least 25 charts a day, often twice that many. I have so many scanners and setups I am refining and testing and have to monitor stocks daily to know how new scans perform and changes to make and this means every single day I see dozens of amazing trades I could have taken, usually much better than anything I did take!
The good and bad news is, this gets easier when you make more money. But that does not mean that you have to wait. As I always say, if you are trading now, you are a real trader. There is no “when I become one” so the sooner you figure out what trader you want to be and start making goals to put that plan into action, the more time and money you will save in the long run.
I recommend dividing your account in 2. Keep a one half for swing and one half for daytrading. This not only lets you practice two types of trading with many trades to study but will diversify your profits. Maybe your daytrading is bad one day and your swings work out. If you are more profitable at one I would put 2/3 on that and 1/3 on the other, and that should be your first goal after splitting to 50/50 – maximize your strengths. Then take one or two positions with each instead of putting so much pressure on yourself to do perfectly each trade.
As for holding trades, I get out when I get out for technical reasons. If it goes on afterward, then I try to figure out why. Usually I never wanted it to go on – I was just doing a scalp.
It’s important to know.. are you scalping (half cycle, about 8 bars) or trend trading (many cycles, but with drawdowns in between them (half cycle up, half cycle down). Your trade is your trade and your profits are your profits and if you lower your expectations you will not be crippled by losses and slow gains as much (or for as long). You should know the trade you are taking first. If it goes better for you that is a bonus but should not be expected.
And if it goes worse, well that is why we use stop losses. You could exit and re-enterer on the new setup, hold through the drawdown and risk it or just take your profits and be happy.
I wish I had better advise but entries are easy, exits are hard. I was lucky to have a good first mentor who help me master entries quickly but I work on exits every day and will as long as I trade.
What cripples us is having unrealistic expectations. Be reasonable and anticipate with that reason. Celebrate good luck but do not count on it. And know that most trades do not work out and plan for that.
We try to do the best we can most of the time, get lucky occasionally, and prevent our frequent losses from impacting our long term goals. All that matters is our balance at the end of the week, month and year. Not one trade or one day.
If you are an emotional trader, write down what a good trade made you feel like in a journal. Say what you did and why you think it worked. Then write down your bad trades and how they made you feel. Try to identify commonalities between your lists. I bet you your losers are mostly trades that you let your emotions do the decision making instead of your brain!
People who ask questions like the one I posted above usually do well in the long run because they take the time to ask questions (to themselves) and try to answer them. They know they hate the way they feel when they get stopped out or wipe out last weeks wins in one day and they want to never feel that again so they do what it takes to try to minimize it, but we never lose it – just learn how to control it better and hopefully, with better trading, do not have to deal with it often.
Make those tiny choices. They lead to the big ones and that’s how we make progress. I learn every day and kick myself every day too. I don’t mind as long as I keep making progress. But progress is not defined by the money we make or lose. It is defined by the choices we make to grow as traders.
Good Luck. Be Safe.