My suggestion would be to educate yourself about the psychological side of trading. The first book that I would recommend reading would be "Reminiscences of a Stock Operator" by Edwin Lefevre.
I think that this is an excellent book to start with because it primarily deals with psychology, with many valuable lessons in this regards. For example, attempting to pick tops and bottoms in advance is very risky, since you are likely to usually be wrong.
I am by no means some sort of trading guru, but I see a few key errors in your thinking:
- failure to cut your losses. Sometimes you will be right, sometimes you will be wrong, you will only be successful if you cut your losses ASAP.
- wishful thinking. You spent the entire day looking at the chart and vainly hoping that it would reach a certain desired point so that you would break even. This is a very bad thing to do.
- pyramiding your losses. Instead of closing your short position on the first position (taking your loss), you further compounded your difficulties by adding to a losing position (in the same incorrect direction). Adding to losing positions generally = bad thing to do, no matter what you are trading.
- chart reading. I was pretty shocked to see that you shorted a contract in the middle of a violent upswing, my own inclination would have been either to briefly go long or to wait it out a bit to see where things would consolidate. Generally a bad idea to take a position that directly opposes a trend.
I think that this is an excellent book to start with because it primarily deals with psychology, with many valuable lessons in this regards. For example, attempting to pick tops and bottoms in advance is very risky, since you are likely to usually be wrong.
I am by no means some sort of trading guru, but I see a few key errors in your thinking:
- failure to cut your losses. Sometimes you will be right, sometimes you will be wrong, you will only be successful if you cut your losses ASAP.
- wishful thinking. You spent the entire day looking at the chart and vainly hoping that it would reach a certain desired point so that you would break even. This is a very bad thing to do.
- pyramiding your losses. Instead of closing your short position on the first position (taking your loss), you further compounded your difficulties by adding to a losing position (in the same incorrect direction). Adding to losing positions generally = bad thing to do, no matter what you are trading.
- chart reading. I was pretty shocked to see that you shorted a contract in the middle of a violent upswing, my own inclination would have been either to briefly go long or to wait it out a bit to see where things would consolidate. Generally a bad idea to take a position that directly opposes a trend.
