Let's go through my last few trades and reveal my mistakes.
MAPP: Bought at 9.03 on the 9 Break without waiting to see if it could hold, then I sold at 8.84 where my stop was. Below is the chart. It later went up to 9.38 near the close.
Next is the most heartbreaking one, BCS. I shorted this late in the day as a fade. I made a technical gain, but lost out due to commissions because I was only playing with 40 shares just to get some confidence back. Well the next two days it gapped down huge. It gapped from 20 to 18 the first day, then from 18 to 17 the second day. I left around $140 on the table on only 40 god damn shares! Heres the chart:
The next one was TIVO, which I shorted at 10.80 just seconds before it dropped to 10.60. I wanted to hold this overnight, but I had a stop at 10.96 just incase. It started to rise and I feared that it had enough strength to gap up the next day. I quickly covered at 10.87 like a pussy, and the next day it hit 11 briefly before crashing down to 10.40's, just like InvestorsLive said it would in private chat. I didn't listen because I wanted to cut my losses too quickly. I could have made about $25. Not a lot, but its something. Here is the chart:
I started trading back in late 2008, and I had been saying that someday I will get it. Someday I will be profitable, and someday I will trade without emotion. It's now about 8 months later and I'm saying the same things. I no longer have as much fear, but I h ave enough to leave a lot of money on the table, and to drive my small account into the ground.
I started with $5000, and my current account is sitting at 3500. That is frightening to me. I need to work on what to do in a trade. I don't know what to do when a trade goes my way because I'm rarely in that position, and when I am I cut the winners just as fast as I cut my losses. I'm extremely pessimistic about my trading right now.
And... end emo rant.
3 comments:
I used to have the same problem you did. I found going back to paper trading to work on my skills helped a lot, and removed the problem of trading with scared money. Once I had my paper trading down, I went back to trading with real money but with small positions.
The other thing that helped me was to set a system for taking profits. We all have stop losses but we all need to have a plan for when to take profits. A good profit-taking plan will help you hold onto your winners.
I also found that taking partial profits can help you hold onto winners. For example, if you're short, put in an order to cover part of your position at the next support point. When that order executes, it's easier to let the rest ride to see if it goes further.
Another thing about paper trading is that it can help you psychologically if you're on a losing streak. Towards the end of May I had 3 out of 4 losing days. I wasn't happy with my trading performance and I wanted to protect my capital so I went back to paper trading to get my consistency back. It was good that I did this because I had some more losing days on paper trading. But having it on paper rather than real money protected me from a severe psychological blow. After some paper trading practice I got some consistency back and then got back to real money today, and had my best trading day since going full time.
I appreciate the comments Yngvai. I will go back to paper trading again to get some confidence and consistency back.
I will be sure to post the results.
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