New here - Question on managing drawdowns in a trending market

asked by u/beatrizsilva · 2d · 4 answers

Hey everyone, just joined. Been trading for about a year, mostly discretionary, small caps and some $SPY options. I'm finding it tough to maintain discipline when the market starts to really run, like it has been lately. I nail a few good entries, then often give back a decent chunk because I get too aggressive or hold too long waiting for an even bigger move. It feels like I'm always chasing the next leg up instead of taking profits. How do you all handle the psychological aspect of managing your risk and locking in gains when the momentum is screaming higher? Any strategies for not letting FOMO override your profit targets?

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Top answers

  • u/bakri_ahmed· 5 pts· 2d

    Welcome! That's a common challenge, especially in trending markets where the temptation to maximize every gain is high. Have you considered scaling out of positions as they run, or perhaps using trailing stops to lock in profits while still allowing for further upside?

  • u/mwhite· 3 pts· 2d

    Seems like a common issue. Are you setting defined profit targets and stop losses before entering the trade, or is it more of a 'see how it goes' approach once you're in?

  • u/white_tyler· 1 pts· 2d

    Welcome! That's a super common challenge, especially in strong trends. Do you ever scale out of positions to lock in some profits, or are you usually looking for that all-or-nothing home run on each trade?

  • u/lottemurphy· 0 pts· 2d

    Welcome! That's a super common challenge, especially in strong trends. Do you ever consider scaling out of positions as they run, or do you typically look for one big exit?