Tuesday, October 17, 2006

Dug a hole and made it deeper

I had no discipline today. My losses were manageable in the beginning. I was down $200 around noon. All the stocks I watched today were tough to trade. I wanted to make my money back. That was the start of my downhill spiral. With each successive loss I got more desperate to recover. Soon I was down $300 and I wanted to stop. Then I get this nagging feeling that I can come back. I just need to find a trade. I keep trading and take more hits. I am feeling the pain. I am going to stop now. I am down $470 for the day.

I was monitoring my thoughts today and there is a question I want to figure out. When I was down $200, I got the feeling that I should stop trading. I also knew that if I kept trading I would lose more money. I noticed that I had no confidence in the trades I enter. After I enter a trade I have a strong feeling that I would lose money and I lost. I kept trading and my hunch came true. I wonder if I lost because I had a losing attitude, which interfered with my ability to trade, creating a self fulfilling prophecy.
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About Me

I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.