Monday, September 22, 2008

Big loss

I don't know what got into me today. The day started off alright and I was up $200. Then I lost all my gains trading during a chop. After that I just went on tilt and took big 300-600 share positions. My loss kept going higher and I was down over $900. I managed to trim it back down to around $460 during the early afternoon. Then I went on tilt again and took some overly large positions and I was wrong. I think the one that got me was a 45 cent loss on an 1100 share position on BTU. I am down $1100 today. I gave up almost half my months gains today. Funny thing is I am not really upset about today's loss. Maybe the effects would kick in later.

4 comments:

The Average Jay said...

What are you watching on the charts to make you get in or out. I went 7 for 7 today and I just used pivot points and S/R lines to tell me what to do. I am letting the market talk to me instead of trying to force the trade. Hang in there and stay in touch. I trade with a few people on line everyday you should look us up on yahoo IM.

tradingwiththeaveragejay@blogspot.com

OBAT said...

AJ,

The problem I had today was over trading and gambling. All my rules went out the window. I wasn't even looking for setups. All I was thinking was putting on a trade with size and catching a move that would help me come back from my loss. These gambling plays usually end up badly. I was just going in with momentum in the 1 min charts, and often I would be in long at the top and short at the bottom.

Thanks for your comments and perspectives, AJ and JMJAtlanta. I feel like this loss has helped me get one step closer from removing the $ mentality from my trading. If I can lose $1k trading recklessly why not take good setups, place a stop, accept the risk and let go of the trade. I feel like I can do that now. Let's see.

FX said...

Hi obat,
I do such fullish things as you do today usually when I'm not satisfied with my level of trading. My wins are not big enough for me. Than I change methods and shot for big gain and get disastrous loss.

Few days ago you made comment about DTs RO, how you would like to be on that level. Well it looks to me that it's the problem. That's why you took such big positions not usual for you. That's my opinion and I could be totally wrong.

The Average Jay said...

OB you are much wiser then you think. The problem is that we all are distracted by the greed and the what if's. Always remember these two things.

1. It is not about maximizing the profits on every trade, it is about increasing the worth of your account. Even if it is only $25 a day.

2. Do not let the devil confuse you by clouding your judgment with the prospects of making a killing on any trade. Remember that what in reality you will get out of the trade is far less then what your mind will tell you to hope for. GREED kills. I have finally gotten to the point that a $15 profitable trade is as good as a $1000. By changing my realistic goals my account is up almost 30%.

3. Trade small. The great wall of China was built one tiny brick at a time

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.