"Hold your winners and cut your losses."A trading maxim easier said than done.
I don't have a problem taking a loss. In fact, often times I am too quick on the trigger when it comes to cutting losses when I should give trades more breathing room.
But I do have a problem with holding winners. It is a habit that is hard to fix. Hard wired into my brain is the belief that as the stock price goes higher, it becomes a worse long and as stock price goes lower it's a worse short.
There is a mental trick to fix this problem. It is to think of your positions not as day trades or swing trades, but as long term trades. This puts one into the mentality of owning a position, rather than renting one. Another trick which I have not tried is to not watch the market when holding a winner. I am an active trader so it would be hard to do. It is something I have thought about trying in the future if I am in the money and riding a strong trend.
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I have specific accounts set up. One is for longer term trades,one shorter.
I also have a set % in my mind I want to make. When I hit it I sell and no woulda coulda shoulda.
2 things you can do.
First, sell 1/2 the winning position. Let the rest ride.
Second, after the position has gone up some, ask yourself, would I commit NEW money to this position right now? If not, sell.
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