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EP1: Stop Loss and Profit Taking: The Holy Grail of Options and Day Trading
Today, I want to share some insights from our recent episode, where we explored the critical aspects of setting stop loss and profit taking on contracts when trading options and day trading.
In the world of trading, setting profit targets and stop losses is not just a strategy; it's a necessity. It's especially crucial when you're trying to grow a small account. The key to making money in trading is to catch big moves. But how do you do that? How do you ensure that you're not letting your emotions get the best of you and making impulsive decisions?
Controlling Emotions: The Two-Pronged Approach
I've found two effective ways to control emotions and make better trading decisions.
1. Hide the Profit and Loss (PNL)The first strategy is to hide the PNL on your broker's platform. This might seem counterintuitive, but it's a powerful way to avoid making impulsive decisions based on short-term fluctuations. When you're not constantly checking your PNL, you're less likely to react to every little change in the market.
2. Set a Stop Loss at BreakevenThe second strategy is to set a stop loss at breakeven for the remaining contracts. This ensures that you'll still make a profit, even if the stock turns around. It's a safety net that allows you to take risks without worrying about losing everything.
Bonus Tips for More Profitable Trading
In addition to these two strategies, I also have a couple of bonus tips that have worked for me personally.
1. Adjust the Stop Loss Based on the Stock's ChartInstead of setting a fixed stop loss, adjust it based on the stock's chart. This allows you to take into account the stock's volatility and potential for growth.
2. Delete Bid and Ask Prices from the Option ChainMy second bonus tip is to delete bid and ask prices from the option chain. This reduces the emotional influence that these numbers can have on your trading decisions.
Conclusion: Give These Strategies a Try
I truly believe that these strategies can lead to more profitable trading. They've worked for me, and I encourage you to give them a try. Remember, trading is as much about psychology as it is about numbers. By controlling your emotions and making strategic decisions, you can maximize your profits and minimize your losses.
Stay tuned for more insights and strategies on the "Trading Lords" podcast. Happy trading!
Hosted on Acast. See acast.com/privacy for more information.
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By Somesh SToday, I want to share some insights from our recent episode, where we explored the critical aspects of setting stop loss and profit taking on contracts when trading options and day trading.
In the world of trading, setting profit targets and stop losses is not just a strategy; it's a necessity. It's especially crucial when you're trying to grow a small account. The key to making money in trading is to catch big moves. But how do you do that? How do you ensure that you're not letting your emotions get the best of you and making impulsive decisions?
Controlling Emotions: The Two-Pronged Approach
I've found two effective ways to control emotions and make better trading decisions.
1. Hide the Profit and Loss (PNL)The first strategy is to hide the PNL on your broker's platform. This might seem counterintuitive, but it's a powerful way to avoid making impulsive decisions based on short-term fluctuations. When you're not constantly checking your PNL, you're less likely to react to every little change in the market.
2. Set a Stop Loss at BreakevenThe second strategy is to set a stop loss at breakeven for the remaining contracts. This ensures that you'll still make a profit, even if the stock turns around. It's a safety net that allows you to take risks without worrying about losing everything.
Bonus Tips for More Profitable Trading
In addition to these two strategies, I also have a couple of bonus tips that have worked for me personally.
1. Adjust the Stop Loss Based on the Stock's ChartInstead of setting a fixed stop loss, adjust it based on the stock's chart. This allows you to take into account the stock's volatility and potential for growth.
2. Delete Bid and Ask Prices from the Option ChainMy second bonus tip is to delete bid and ask prices from the option chain. This reduces the emotional influence that these numbers can have on your trading decisions.
Conclusion: Give These Strategies a Try
I truly believe that these strategies can lead to more profitable trading. They've worked for me, and I encourage you to give them a try. Remember, trading is as much about psychology as it is about numbers. By controlling your emotions and making strategic decisions, you can maximize your profits and minimize your losses.
Stay tuned for more insights and strategies on the "Trading Lords" podcast. Happy trading!
Hosted on Acast. See acast.com/privacy for more information.