Day 1: I can remember how it all started, last Tuesday (phew, thankfully it was a short week). I actually started out the first 1/2 of the day with some gains. Then I became frustrated missing a cover because I was on a phone call. This outraged me. Instead of taking decent profits 15 cents higher, I figured lets just hold, it will get down there again, I am sure of it. To make matters even worse, I added to the position, even though the bigger time frame said this was a bounce area. The stock bounced. But then it came back down. I was in green on every share that I had. The market bailed me out phew. Well, I had my greedy pants on. I knew it was going lower! We know the end of this story. I covered for a much bigger loss than I previously expected.
Day 2: I had in my head the market was going lower. I started out with a $450 gain in FB short. See, I knew it. I'm so smart we are going lower today. So I looked for every short opportunity there was. Unfortunately the market had other ideas. All the stocks that I was watching, FB and NFLX for example, all held 30 minute support and had perfect trends. Instead, I became the trapped short (See chart below) I made my eyes see what they wanted to see instead of reading price action.
You and I can clearly see how foolish I was by taking shorts in these spots. My eyes wanted to see short set-ups so that is what I saw. By the time I figured out what was actually going on, it was too late and I had given back profits and then some.
Day 3: Made 1 very nice trade and quit for the day. I was back on track right.
Day 4: I had in my head we were going lower once again. I was in 2 positions by 9:33. My anxiety was at it again. I was early and covered pretty much at the top of both positions. I quickly realized my mistake and had to re-enter. This time the stocks dropped quickly and I had nice gains in both positions. But I lost more than I wanted to in my first 2 trades so these quick gains weren't good enough. We were going lower I wanted a home run! Before I knew it the stocks held their 30 min support and bounced, I had to cover now with a small loss. When I saw what the market was doing I then decided to go long a stock. And was up 1.40$ on it. But I KNEW it was going 30 cents higher to my target (where I had a sell order already out) Plus I HAD to get my money back. I let it go, let it go let it go, HOPING it would bounce before I finally had to sell for a loss. I took 5 trades, 3 of the 5 I had really nice gains. And ended up with a loss on all of them.
If you read this entire article of my jumpy thought process, well, kudos to you. As you can see from the way I was talking to myself in the head, every mistake I made was all emotional. If I stuck to a realistic plan, I know for a fact I would have had another nice week of gains. Unfortunately, I traded my hopes and dreams and was incredibly greedy. This is not how I became a successful trader. I will chalk last week up as a learning experience. When I start to feel like this and have the anxiety to go along with it, its time to take a break or shut down completely. All I can say to myself after reviewing that is WHAT THE FUCK WERE YOU DOING?! My mentor Kunal always says "If you chase, you die" Well If you chase, are greedy, emotional, stubborn, don't have a plan, you die. Its that simple.
I will not let that experience happen again. I come into this week with a fresh start and know what I need to do. So far it has worked, I had a decent Monday.
Great commentary.
ReplyDeleteExcellent write up - great way to get it out and think about it. you are not alone - what you describe happens to us all
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