Trades 08/10
6 trades
0 wins
6 losses (-5$, -30$, -10$, -50$, -50$, -50$)
Daily balance: -195$
YTD balance: -400$
This probably what it must feel like, being in a washing machine and spinned around... A
bad day for me, not so much $$$ wise but more discipline wise.
Overtraded, did not follow my rules, lacked discipline.
(see chart below for visual on trades)
Trade 1: -5$
Was immediately bearish as soon as I saw that the markets gapped up but werent able to keep their gains. This has been a very reliable sell short signal. Indeed, SPX and Nasdaq never managed to recover their losses.
Entered short at 9611 (09:34), but was taken out at breakeven almost as the market turned around at 9612 (09:56)
Trade 2: -30$
Market turned around and rallied at the highs. I should've disregarded that and probably shorted near resistance, but got scared of missing out on the big one (continuation to the upside) and entered long near the high at 9631 (10:02). Again, moved my S/L up and exited on small loss at 9625 (10:05). Lack of discipline.
Trade 3: -10$
As soon as I realized that the highs weren't going to be taken out (Dow was testing its highs whereas Naz and S&P were much lower --> divergence) entered short as close to resistance as I could at 9625 (10:12). Took 2nd position 20pts lower as per my system at 9603 (10:14), unfortunately the market did not follow through as we were stuck within the chop. Moved my S/L to breakeven and was taken out at 9615 (10:19) with 1 pt slippage.
I should've stopped trading here, as per my rule of 3 trades max per day. But since my losses were pretty small so far, I decided to at least try to make it back. Classic revenge trading, with the classic consequences.
I know I should've known better, it's always easy after the market close... Notice how the losses get bigger from here.
Trade 4: -50$
Still try to catch that downside breakout. By mistake entered on 2 positions instead of 1, at 9600 (10:42). As soon as I realized mistake, I exited (I always do this when I make a mistake, to limit risk), but not fast enough as the market moved against me. Exit at 9605 (10:43)
Trade 5: -50$
Here's the comment I wrote on my journal for the trade:
"Market broke low once again. Enter Short." What was I thinking?
Entered short at 9588 (10:57). Of course the market reversed, taking me out on my S/L at 9598 (11:05).
Trade 6: -50$
I decided to take one last stab at catching the break from the consolidation. The market broke its intraday consolidation trendline, made a Lower Low. Entered Short at 9595 (13:24) but the rally didn't follow through and I was stopped out at my S/L at 9605(13:47).
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The irony is that the market took me out and then broke down as I was expecting all along. I was not in the rally though, as I closed the computer (finally!) to avoid being tempted to take any other trades.
I'm not regretting closing the computer, since this is one of the things I do after a string of losses to stop myself from overtrading. What I do regret, is that I didn't close it after the 2nd (max 3rd) trade as is my plan!
I was initially reluctant to write about today's trading. Nobody likes to admit he/she was dead wrong. But since the purpose of this journal is educational, I decided to go ahead and write everything in detail. Afterall, one of the goals is to identify and limit destructive behavior, and the first part is to admit to it...
I want you to keep in mind that the amount lost in each of these trades is very small %-wise, compared to my account. (Less than 0.3%) And I consider this learning capital of some sort, that's why I'm keeping my risk to that minimum level. Once I have the strategy figured out I plan to increase the risk - to produce more rewards.
That is not the point though, of course. The point is that I didn't follow my strategy, or that the strategy was not adequate in dealing with days like this.
As I said in previous postings (written during the day, after the string of losses) I probably have to sit down and rethink things through. By writing this journal and through your comments things are starting to become more clear, especially the fact that I still have a lot of work ahead of me to become consistently profitable. But there's no way I'm giving up.
I'm already considering to implement part of Peter's strategy of waiting for a pullback to an MA before entering. Further, the idea of using a longer term MA and only trading long above it or short below it is also very appealing.
Your comments are always welcome, especially constructive criticism. No "I told you so's" ...
T
PS:
If you didn't figure out yet, I'm ending my day early today.
