You must be happy with the system you're using since you continue to use it, but does it do an adequate job of keeping you out of the market when you don't need to be trading at all? --Db
That's a guaranteed way to lose more money. You should examine very carefully what happened today and why this happened. Only then you should proceed. Take a break, no reason to rush in. Take it easy. The market can wait.
I completely agree. Yesterday before the market opened I had a burning desire that I 'had' to make money, similar to your feeling that you 'had' to make some back. Having had this feeling before and recognizing that it is normally followed by a bad day, and not wanting to walk away from the market, I set my default trading size to 1/5th of my normal size. I had my bad day, got the 'have to make money' feeling out of my system and had a minimal loss day. Today (tomorrow) is a new day and a chance to get my (your) trading back on track slowly.
My thoughts : have a maximum # of trades allowed and maximum daily loss limit with the broker (assuming your broker offers one). It will save you from days like this, which can really hurt your account, as well as your mental state and future discipline. I agree once you get into thinking I want to get the money back ,that's trouble.It soon turns out to I want to get 'MY' money back and slides downhill very quickly from there. Usually I find if by 3 trades I still am losing or want to get in another position ,my view of the day is not correct or it is correct but I'm not holding my winner long enough.
I have a similar approach and use it with two of my systems. The systems usually do not give me more than one entry per day, sometimes less (at least for one of them), but sometimes I can get 2-3 a day. Yet, when the first entry is a bummer, I will not take another one if it happens the same day. On the other hand, if the first entry is a success, I will take the second one if there is one, of course.
You've probably noticed the same thing. On the days when I have done more than 4 trades, my results have been poor. On the other hand, on the days where I sat patiently for the higher quality opportunities, and only took 1 or 2 trades, I almost always ended up positive for the day. Diagnosis: I am Overtrading for my style.
Corallus, "I feel as though I could incite a rally in the S&P if I were to choose to short right now. Likewise, I could make the S&P drop off the edge of the cliff if I were to buy." Are you sure you are not me posting under another name?
Another disappointing day for me. After 3 consecutive losses, I stopped trading real $, but continued to watch the market in the hope I might learn something by plotting stochastic divergences. In the chart, trades D and E were only paper trades. Funny how they were the profitable ones! Oh well, there's two ways to look at it. One, I missed a couple of profit opportunities by stopping real trading after 3 consec. losses. Or, two, I probably would have ended up finding a way to lose even more had I not enforced my daily downside limit. I know from experience that there is a world of difference between taking and managing a real trade vs. taking and managing a paper trade...the paper trades are always more profitable!!! 3 trades -9 points