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Why it is so difficult to exit at stoploss

Discussion in 'Technical Analysis' started by jignesh_acharya, Feb 10, 2015.

  1. jignesh_acharya

    jignesh_acharya Active Member

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    What is preventing us to exit the trade on stop loss hit? I am sure most of the people having this problem
    A "HOPE" of getting back in to the trade...
    Any idea to overcome this psychological barrier....
     
    jignesh_acharya, Feb 10, 2015
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  2. shabbir

    shabbir Administrator Staff Member

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    The stop loss that we keep is mainly to satisfy our trading that we need a stop loss but we don't actually think how much we will loose if it is hit. If you calculate that, you will not have issues executing it but yes at times you will not have the courage to trade like I always have issues when ROI is not right. Once you hit series of stop losses, and once you execute them, you will think more about ROI than anything else.

    If you have issues executing the losses even after you have calculated ROI and only executed the trade assuming you will loose, you have to be an investor than a trader. See my article on this here - http://shabbir.in/trader-or-investor/

    So I think it is all in the mind and what part of your brain is controlling you is what will decide what you can do the best.

    BTW executing stop losses is most difficult part of the trading and everyone has issues with it.
     
    shabbir, Feb 11, 2015
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    hareram1977 likes this.
  3. jignesh_acharya

    jignesh_acharya Active Member

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    One more question is that we should execute the stoploss based on the EOD closed price? ( we can look near 3.15 a.m., which will give us the tentative close price of the day)

    Or we should exit based on the intraday break?

    Some times intraday break may recover and stock closes above the stoploss, and some times loss increases after intraday break

    which strategy we should follow as i put mental stoploss instead of the puting stop loss order in the system..

    Please guide...
     
    jignesh_acharya, Apr 4, 2015
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  4. shabbir

    shabbir Administrator Staff Member

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    Depends on your initial purchased timeframe. If you have taken a position based on daily chart then closing below the levels and if you have taken a position based on smaller timeframe charts, it should be based on that tick value.
     
    shabbir, Apr 6, 2015
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