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Position sizing, risk management, and trading around your core thread:
When you're going into a trade, and this should go without saying but I'll say it anyway, NEVER go full position in one single spot. If your entry is wrong, your exposure is huge and you'll panic sell. Prolonged repetition will also blow up your account. Always, always scale in.
If you properly scale into a trade, even if it goes against you, you can almost always get out with either a paper cut, break-even, or profit. To preface, I don't like playing stocks that run out of nowhere. The R/R isn't there for me, so I prefer adding heavy in demand zones
The odd times I play a stock that is running intraday out of the blue, I'll take a small position and if it goes against me, I plan to cut or add more bids and wait for it to show a sign of a reversal. When it does, I'll add very heavy, bringing my average down significantly
and allowing me to break even or get out with a very small cut right when it pops even a bit. No trader is perfect, but if you can manage your risk well enough, you can make a career out of this. Here's an example.
I added some $EXPR up here thinking it was a pullback before another leg up. If I added everything at A, I'd have panic sold at B. Instead, I added some at A and then very heavy at B on the high volume flush, expecting shorts to cover and a bounce, and then I sold at C for profit
At this point, it shouldn't matter to you if the trade continues up. Your focus HAS to be on risk management and repositioning for a better average, which mine was. I also noticed a head and shoulders forming on the 5-minute chart, which heavily influenced my sell on the pop.
Moreover, if I'm playing demand zones (which give the best R/R), I scatter my bids with some wiggle room. If some get filled and price reverses, I can always average up. If all get filled and it declines, I'll sell for a small cut.
If you played this $WISH demand zone and had 3 bids, Bid 1 would have gotten filled and the price would have moved an entire dollar from your entry. You easily could have averaged up and profited.
Conversely, even in the following candles, you could have had the same bids and got them filled and played a similar move, with a clearly defined risk right under with your stop loss.
But, if you had your entire position with one bid, your play probably would have gone like this and you'd have been stopped out for a loss, watched price reverse, FOMO chased and just subjected yourself to revenge trading. Do not be this person.
Scaling out is just as important. Learn to trade around your core to maximize profits. One rule to engrain into your head is that stocks in an uptrend come back to retest prior highs before continuing up. Use this knowledge to your advantage. Vice versa on the short side.
Don't be the person buying all at A and selling all at B. Trade around a core to keep your average low while maximizing potential profits. Get in at A and sell MOST at B. Wait for a pullback retest and if it confirms, add again at C, scale at D for double top, and scale the ride
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