- $95
Very frustrating day, based on making the same errors I firmly thought Iâd overcome by having written rules, but obviously I need to say the rules aloud 3 times each morning, because out of sight out of mind is the problem.
Here are my rule violations today:
1) did not take my opening ES signal
2) did not take my opening ES signal despite a second confirmed opportunity
3) chased a trade and entered at an absolutely inexcusable price
4) allowed previous trades to influence a new trade
5) As a result of #4, I exited a trade before it reached my stop above previous resistance, assuming it was headed there anyway
6) As usual I ignore my Hand of God trade idea that comes to me each morning
Letâs start with the Hand of God trade idea: Every morning a stock trade idea pops into my head. It must be a subconscious feed from action Iâve seen over time or the previous day, but whatever it is, it seems to happen every morning and Iâve now come to believe these are the Hand of God trades that I should be taking without question.
This morning it was ESRX. Something told me to go long ESRX. I completely ignored this intuitive feed, as Iâve ignored so many in the past. (I donât always ignore them; Iâve taken a few and theyâve all been nicely profitable. Iâm a slow learner though.) ESRX came back onto my radar when I noticed saw it hitting the high ticker. And again my fear of jumping on board kept me out of a nearly $2/share trajectory up.
Then I didnât take my ES opening long signal @ 999.00. I had a second chance to take it and didnât trade it then either. After all the great advice Iâve gotten on this thread, and while Iâm reading Al Brooks book, too, youâd think that this wouldnât happen.
Yet hereâs what happened. The entry trigger price of 999.00 was fast approaching and I thought, âWell, the job numbers were bad so Iâll wait for confirmation of the long.â ES rose a tad, then pulled back just near that trigger price and winked at me from across the dance floor and said, âCome on, Doj, have a long dance with me.â And I thought, âThose job numbers were bad, I donât think this market can dance, Iâm not trading ES today.â
Price action.
Sit in a dark room and ignore the news. Just let the price action tell you what to do.
What a huge and difficult lesson to get into my head. Iâm not giving up yet though, because I keep thinking I see a tiny sliver of light at the end of the tunnelâ¦
So I decided to do some stock trading.
Short TGT @ 45.14, covered @ 45.10 when the move didnât materialize: + $14. Not a bad idea, and a solid exit based on price action at the moment.
Short TGT again @ 45.21, covered @ 45.20 for b/e when again the move didnât materialize. Again, not a bad setup, but no follow through and I decided to re-evaluate.
Short TGT @ 45.15 when it appeared to weaken, covered @ 45.12 when the move didnât materialize: +$10
Short TGT @ 45.18, got partial fill, covered @ 45.14 when once again it stalled: +$9
Now the fact that I had several scratch trades tallying a mere $33 influenced my next trade. TGT started falling a bit again and I was pissed I didnât just hold one of my earlier shorts. âNow itâs finally breaking down" I thought and jumped into another short WITHOUT LOOKING. As soon as the trade was on, I noticed that not only was it oversold at this level, but it was at a strong support level for the day and I entered the trade without waiting for a break down through that level! And because the other trades were all scratched and price eventually fell, I let that influence me and I placed a stop much higher than I normally would have and ended up losing $68!
Then I lost focus altogether and got a bite to eat instead of watching the new action, thereby missing the very best short entry of the day at the double top. This is an ongoing problem for me. Scratch trades are OK, they generally leave you at b/e or close to it, so once you catch the real move you win! But you have to stay focused.
Later on in the day I shorted TGT again down near that earlier support level figuring for sure it would break down now, and ended up scratching it when I realized (again checking the chart after the fact) it had formed an internal double bottom: - $10
Short X @ 43.70 on weakness and covered @ 43.69 for b/e when the move didnât materialize.
Short X @ 43.68, pullback from lower high, and placed a stop just above previous resistance. As soon as I was in the trade I realized that the chart setup was not very high probability, because there was also a higher low (Iâve overlooked this a few times in the past). So I expected nothing more than a scalp, but I really thought it might break previous resistance and when it started to move up I exited PRIOR TO MY STOP, which turned out to be the exact high of that particular move and price then moved down to 43.55 and the trade wouldâve indeed provided an acceptable scalp had I left it alone! - $50
These are the days that try a traderâs soul, but though Iâm frustrated with myself, Iâm not at all discouraged because at least my loss is the result of easily identified and correctable mistakes, not a result of ignorance.
Seems to me if someone can fade a trend by nothing but osmosis then why would they not be able to just FOLLOW the trend in the first place? It just does not jive with sensable reasoning now does it?
