setting good SLs...

Being a beginner and believing in "reduce your losses, run your profits", i rush to do both - reduce losses and reduce profits also. Today's nifty was an example. I had a short from Friday around 5070 area. A wise man ( tradeinniftyonly.blogspot.com ) had told me that 5070-5090 was a good area to take a short. Alright, followed his advice. But was never sure of the SL. So when the spot got to 5075, panic sets in. From a future standpoint, I was down 10 points. After trading so long, I have to realize that a 10-point SL is too small even for a day trade. So my SL was taken. But the market was at 5075. Nowhere near 5090. Next is the downtrend line connecting the LH ( lower highs ). It clearly showed ( below ) 5090 as the point which needs to be broken. Till now, the high of the day is 5087 and the market is down 50 points at the moment of posting.








So lesson is - if one is going to having such small SLs, then you have to be absolutely sure or you are taking a lottery call ( which is "hope" ). In other cases, S&R ( supports/resistances ) are the best bet. If S&R is beyond your allowable loss limits, then the trade should not be entered. Because at end of day, if you add up all these losses ( dont forget brokerage + taxes ), it will not be worth the effort. Exactly what happenned to me on Friday. On the screen I was up 500 rupees ( after 4 trades ), after brokerage, I was even and after taxes, I actually was negative. Will I follow my own notes/advice ? I doubt it until I change myself first.