Thursday, February 01, 2007

A humbling experience



I was very impatient in the morning. I was telling myself to be selective but I was doing the opposite. After my loss in SNA, I just lost my focus. I was thinking about making my money back. I took a couple more hits after that and I was down $360. Later on in the day I caught ASN, but since I had a fearful mindset I took profits early. I brought my loss down to around $160. When I saw it continue to go up I went back to scalping because I was desperate to recover. I found that my efforts were futile as I racked up $40 worth of small losses and commissions.

I got a lot to learn. I was lucky last week because I caught the right stocks. These past two days the market behaved differently and I have been losing money because I was trying to trade the way I did last week. To make matters worse also I increased my size. Better moves came in the afternoon, but I had no confidence to trade them. I am going to cut my size down to 100-200 share positions and be very selective on my trades. I am going to stay small until I experience all types of conditions and be truly confident in following my plan.

I lost $200 today.

3 comments:

The Addict said...

We've had a very similar last 2 days. Hang in there.

MrMike said...

If you haven't already...pick up the book, Tools and Tactics for the Master DayTrader: Battle-Tested Techniques for Day, Swing, and Position Traders (Hardcover)
by Oliver Velez, Greg Capra

Read and outline the first section. Then keep rereading. It's the book that really made it click for me on the psychological aspect of trading...and on how to eliminate mistakes.

onebadtrade said...

Thanks for the suggestion. I have that book, but lent it to a friend. Its been over a year. Maybe I'll get it back and review it.

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.