Thursday, October 16, 2008

Lost it again

I thought my blow ups are in the past since I have been trading small and exercising discipline for over 2 weeks. Today I lost it and got emotional again. I was cursing at my mistakes and praying for my losers to work. I was down around $280 and I took a 500 share trade and lost $150. After that I lost my cool and forced more trades. I lost $800 today and now I am down $200 for the week.


JMJAtlanta said...

I ask these two questions before transmitting an order:

Will I accept the loss should it occur (aka am I comfortable with my stop)?

Am I executing this trade because of my last trade or current P&L?

I will lose some, so I must have my stop in a comfortable spot where I won't get emotional if it gets hit, even if it reverses on the penny.

I also can't place a trade simply because I'm in the red for the day. I've also caught myself trading simply because I'm in the black for the day. Both of these are not reasons to take a trade.

OBAT said...

I have been asking myself similar questions and have been disciplined for two weeks.

Something snapped and I totally forgot about asking myself anything.

The big losses I had today was taking larger than normal size trades when I thought the market would break out. I ended up buying near the top and shorting near the bottom.

JMJAtlanta said...

I know of noone that can follow their own rules. We all fall off the wagon.

I have proven to myself (over and over and over again) that impulsive trading costs me money. I must only trade when the opportunity arises.

Am I cured? Unfortunately, no. My hope is that I see mistakes before I make them. If I can't do that, I want to see the mistake soon after I make it.

Sometimes, it takes until the end of the day or end of the month to see my mistake. That's painful.

The two worst things you can do:

1) Not realize your mistake and trade until you're out of money. I doubt from my limited knowledge of you that this is your problem. You learn from your mistakes.

2) Not put these trades behind you. Learn as much as you can from your mistakes, then put them away.

You must be at the top of your game each and every trading day. Worrying about the losses of yesterday is a distraction you (literally) can't afford to have in front of you.

If you're like me, it will happen again. Try to prevent it, but don't worry about it. Focus on what is happening now. How can I be my best today?

Happy options expiration.

JMJAtlanta said...

Sorry to pepper you with comments, but Dr. Brett's post today is very applicable...

Anonymous said...

Today is option expiration day, so it's very hard to trade. I too took a loss for the day. But luckily I am still up for the week. And as you said, trading emotionally doesn't help. I have the same problem too. No matter how many times I told myself to keep cool, but still doing it everytime. It's hard, just keep trying to overcome that problem.

Good luck in the coming week


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.