Risk Management is the key. If I can master Risk Management, then I can grow my small account especially in regards to cutting losses quickly.
So How do I cut losses quickly?
Click faster and don't hesitate! I have minimized my losses from $600 to $300 and to $280. I gotta cut it further. On average, I make $100 gain per trade currently with $2800 in my account, if I win 2 out of 3 trades, that will give me $200 gain, but a $280 loss on 3rd trade will wipe that out and put me in negative -$80. <-- NOT GOOD
Risk and Reward should be 1 to 3 ratio! That means for a stock that will give me the opportunity to earn as much as $0.30/share, my risk should be $0.10/share. But that is still too much for me. I need to cut it down to $0.05/share MAX for my risk.
Have a plan man! I mean I go into a trade with a mental plan. I usually have a plan to cut losses at $0.05/share max, but emotions get in the way and I keep staring at the computer and wait for the stock to move again whether it goes up or down. I hesitate like that about 3 times before I actually sell my shares. This is a bad habit. BAD HABIT....
So going forward, my goal is to practice having a plan ahead of time so I won't hesitate as much. It is much easier to cut losses this way. Having a plan is useless if i do not STICK TO MY PLAN! Remember to STICK TO THE PLAN no matter what happens.
If I make a good $0.15/share profit, try to sell half of my position and keep the rest if I think it will go higher. Don't get greedy and when it's time to sell, just sell the damn stock, don't fucking wait for it to go up another cent -.-' it's time to end this habit as well. When you decide to sell, pull the trigger no matter what. Don't make excuses!
Lesson Learned: Pull the trigger when decision has been made. Do not get greedy for that 1 extra cent, it always turn into -0.04 cents or more on a cliff dive!