True. I like to call it putting my own needs above those of the market. That's something I did to the extreme today.
AFterburner: Glad you enjoyed my insight. I have often thought of what you are speaking about regarding keeping your position size. The position size for me has to be large enough so when I do have a decent size winning trade I am satisfied,and small enough that a few losers is not going to cripple my account and my emotional stability. If the position size is too small I when I get winners I'm not satisfied and I end up violating my plan looking for other trades only to regret it. It seems to be a battle but when I find trades that can use a smaller stop than normal technically there is no reason they can not have a larger position size.But decreasing the width of the stop even when I feel it's warranted often ends up stopping me out of trades that I was right on the direction and would have worked with the normal stop. The happy medium (for my type of trading) is to limit myself to 2 trades a day maximum and this has kept that potentially destructive overtrading demon coming out to haunt my account. Enjoy the weekend.
Trade 1 (SLD 1385 BOT 1384.5) Trade 2 (SLD 1383.5 BOT 1383) Trade 3 (SLD 1382 BOT 1381) Trade 4 (SLD 1380 BOT 1379.5) After Trade 4, I realized that I just needed to quit for the day. I was still extremely frustrated and was not trading the way that I'm supposed to. So I went to cancel the remaining orders that I hadn't used. What I didn't realize is that when I right-clicked to hit cancel I accidently hit transmit. This mistake caused me to be net short 40 contracts at 1381.5 and by the time I realized it several minutes later the market was at 84X84.5. I absolutely panicked. It was after 3:45 EST and I had no idea what to do. There had been some resistance around 1385, and I thought there might still be a possibility to get out at breakeven. It did go down to 82.5X83, but I wasn't smart enough to get out there. I ended up getting out at an average price of 1385.5. This "trade" was absolutely devastating. It's taken me over an hour just to be able to think about it. This 4 point loss with 40 contracts has crushed my spirit. I've been trading bad enough as it is without having to overcome a mistake of this magnitude. This is the first time that a mistake like this has happened to me (accidentally transmitting orders when I meant to cancel them), and I panicked mainly because I didn't realize it in time. Right now I feel like I've totally failed as a trader. The worst part is that I feel compelled to try and get back the loss which I know will only make the situation worse. One thing that I've realized is that whenever I have a loss (especially a painful one) my trading changes. I tend to deviate from my plan and start taking unneccessary risks (gambling) in order to get the loss back. The even bigger problem is that even if I'm lucky enough to get back the loss, the negative trading habits continue. I think that to a certain degree I have been doing that since Friday, August 29. Historically, the only way that I have been able to recoup losses is when I just stop caring about them. Then I am able to return to my normal trading, which is the only thing that can provide me with the returns that I seek. I've tried to struggle through the past week, and it just isn't working. As much as I hate to admit it, I absolutely need to take some time off because my psychological condition pertaining to trading is getting worse not better. There's no sense losing any more. I need to force myself to stop before I spiral completely out of control.
AFterburner, sorry to hear about your loss. Something similar has happened with me as well. I accidentally shorted more when I meant to exit my existing short position, but I realized this right away and covered immediately. Again, sorry to hear about that. -FastTrader
Mistakes like that are really frustrating, especially when they are pretty expensive. I had one mistake like that on Friday last week with ZB, luckily, I caught it quite quickly (4 tickâs loss) but it still was a painful loss and a terrible end to a not so good week of trading. All in all, almost every trader had one (or several) of those mistakes. You need to forget about it and move on. No point in trying to "revenge" the loss, it will only lead to more losses. Be strong and trade your plan TM Trader
AFterburner, I see a lot of myself in you, as I'm sure do others. Of all the journals to date, none has been able to express so eloquently the feelings and emotions of its author as this one. I know I was always encouraged by the supportive posts that inevitably followed a "bad" day. We all make execution errors, but I found that it helped to incorporate in writing anything that could prevent any similar mistake in the future. As a result, I have implemented 2 countermeasures which help mitigate the effects of an error such as yours today : (1) After each and every order, mouseclick, keystroke or physical movement either away from or back to my PC, I quickly scan the open position and open order boxes. It is now an instinctive/obsessive reaction - choose the correct adjective. (2) In the event of an execution error, such as buying instead of selling, I reverse the error immediately. I have found that my emotional state after such an error is not conducive to "finessing" an exit, not to mention any additional compounding effects my rationalizing, devious mind may come up with : it's after 3:45pm, the Naz is at record highs, why not close out 20 and keep the remaining 20 overnite, odds are high that I'll recoup my losses tomorrow. And yes, I will say it again even though you're in no mood to hear it - you posted incomplete results, omitting the times of the trades - there is no need to reply as you have explained your rationale in a previous post. What is frightening you is the immense power that you have been blessed with.
Yep, here's another trader that has done this human accidental act. But, Afterburner, it is just that: a human mistake. There's no difference with doing what you did and hitting the wrong floor button on an elevator. Of course, life has it's humor: Wrong floor from an elevator; you stand there for a moment and laugh at yourself. Wrong button on a trade; what do you do ? I've read some of your posts where you have made some decent money but were not happy because you did not feel that you traded well. This loss has nothing to do with not trading well, does it ? Hopefully you will separate the two issues: 1. How you traded today according to your goals and 2. The monetary loss due to an accident and Deal with each issue independently.
This is a very good advice, and quite similar to what I do. After each execusion I look at the open positions and if necessary manage the trade so it never slips too far once I made a mistake. TM Trader
I would like to thank everyone who posted today. Even though this is just an anonymous forum, it really means a lot to me that there are people out there who care and want to see me do well. Thank you. Anyway this particular post brought up an interesting thought. On August 20, 2003 I posted the following: This is a great example of handling a mistake well, and even though I lost money (not much) it didn't bother me. I think this is the kind of attitude that you were referring to, and I agree that it's the right way to go. What makes me so upset about today is that I didn't immediately exit the mistake. The problem was that after I exited Trade 4 I could tell that the market just didn't want to go down. Basically it boils down to me holding a major position in which I knew the odds were not in my favor. Believe it or not, I even thought to myself that I would be better off reversing the position at 1384 and going for 1388 instead of 1381.5. That idea sounded absolutely crazy/illogical though. It had just traded at 1381.5 only a few minutes ago and hadn't traded at 1388 all day/year. I mentioned that there was resistance at 1385 and that was true. However, after Trade 4 I also knew that it finally had the strength to penetrate, which it did. The initial mistake and subsequent loss from 81.5 to 84 severely irritate my perfectionist side, but I can deal with that. What kills me is the loss from 84 to 85.5. Adjusted for 20 contracts, that is a 3 point loss. The exact same 3 point loss that I suffered on Friday for my insubordination to market internals. Once again my appeal to logic, high regard for my own intellect, and perfectionistic manner have caused me to fail. It's almost like I've reached the next level of trading except in order to go on I must leave behind the qualities that I have so highly prized. I now understand that it's not me that makes the profits. It is the market. As good a trader as I am (or more accurately think I am), I couldn't fix that mistake. Nor could I stop the market from rallying Friday morning. Nor could I stop the market from rebounding Friday afternoon. It's extremely hard for me to realize that I don't make the profits, I put myself in a position to make profits. There is a huge yet subtle difference. I've always known that there was a fine line between profit and loss, but I didn't know exactly what it was until now. Anyway, in order to progress to the next level, I need to set aside my own needs, emotions, and even/especially thought processes and trust the tape completely. However, it's not like I'm going to discard them completely. I just need to focus them on analyzing the tape and not on trying to figure out entries, exits, direction, and magnitude. This is going to be a hard transformation because essentially I'm trying to override my physical nature. Trust the tape and lean not on your own understanding. I have that saying, and I know it to be true. But it's not true of me. I'm hoping that others will understand what I'm talking about here. There are plenty of great sayings out there. However, speaking from personal experience, you don't really understand (the word understand doesn't do it justice; it is almost like a physical possession) them until they are true of you. One day I hope that "trust the tape and lean not on your own understanding" will be true of me.