March 22nd – Taking Losses

Today was a bit of a blow. After missing yesterday’s moves due to being at work I was feeling positive about being in front of the screen today. In the end I managed to lose 4 ticks on a trade I inadvertently entered and then a further 2 on a trade that I probably didn’t give a wide enough stop on. 6 ticks plus fees is a big blow on my little account so what can be learned, and what positives can I pull out from a day where I struggled with confidence?

I got home from work at about 13:15 GMT, so about 08:15 US time. By the time I’d got the screen fired up, yesterday’s levels in place and done some basic analysis I was looking at 08:30 before I got underway. No worries though and I searched myself for any feeling of being rushed before I unchecked the “Global Sim Mode” in Ninja. No, no feelings of pressure or needing to catch up on the day at all – so we are good to go.

Straight away the market was moving, well way more than previous trading sessions at least, principally because I’m trading at the right time. It didn’t take long before I identified what I thought the market was doing and had a plan for where I might like to get involved. About 30 minutes into my trading session I accidentally clicked the mouse where I had it hovering, so now I’m in the market having sold one contract. I’d like to say at this point I immediately just bought it back and got out immediately, I didn’t. Because the market was only a tick below where I thought about selling, I decided to allocate the risk and manage the trade. To give it the room it required I needed 4 ticks and there was ample room if it went well to gain 4-6 ticks I thought. Pretty quickly price moved against me and some other clues made me think I was probably going to be down 4 ticks. At this point I should have just got out but I didn’t. Needless to say I was taken out with a 4 tick dent in the account. Not good.

I took a couple of minutes to compose myself and figure out what to do, my first instinct was to call it a day but I thought this wasn’t the best approach. The day would still yield good opportunities and if I could get past the feeling of wanting to win the ticks back felt I could at least have one more go at a sensible, well planned trade. 6 minutes later I felt was the right time. Looking back I’m noticing how little time between trades that is and also how quickly on getting in front of the screen I’m initiating trades. A few weeks ago I was still fresh from the webinar and spending most of my time on my hands, seeing more of the market and being much more calculated in my entries. That’s a big takeaway from today. Sit on your hands more, keep fingers off the mouse and watch. Don’t let the fact you haven’t participated much recently con you into participating when you don’t actually have a clear ideas as to why you want to.

So roll on 6 minutes and I think the market is good for a sell trade. Looking back I think it was, but it probably wasn’t good for the stop I gave it. Here I distinctly remember feeling under the gun for trying to make back those 4 ticks and worrying about losing more, not ideal. So instead of giving it the stop I should have given it throughout, I tightened it too early. After a brief dip in my direction it took me out to the tick before moving around a bit and ultimately heading off in my direction. So was the second trade valid and was it just poor timing? Probably not. Truth be told I think it probably was an entry born out of wanting to vindicate myself from the previous blunder and I was hasty. A few minutes after my entry when the market did what I wanted it to, there were clear signs so I feel that probably should have been when I got in, not when I did. I’m glad that the market then followed through as I expected which shows I’m at least learning somewhere but I should have probably got out with a one tick profit or scratch rather than the 2 tick loss I did.

So to sum up today it was a pretty poor day I think and a few things clearly stand out. Firstly the psychology of the small account size is a big issue, its abundantly clear now that a big account gives you flex, I’m now at the point where a few more trades like this and I’m looking at having to replenish. Replenishing is something I’d hoped I wouldn’t have to do but I’m also realistic about the fact that there was a high percentage chance that I would need to given what I’m trying to do, so we will see how we get on over the next few sessions. The next big thing I learned is that if I get in a trade accidentally like that, just get out. Just get straight out. Thirdly (and this ain’t easy) don’t let the previous trade influence the next trade. I tightened the stop too early on what might have been a decent outcome and it cost me 2 ticks. Objectivity is elusive but priceless.

So what next? Well after my second trade I called it a day, and I’m going to call it a week. If I’d have had a bigger account maybe I could have tried another trade but I think 6 ticks is a big enough dent for one day, it’s not a lot for the pro’s I’m sure but for a learner I run the risk of compounding losses. I need to try and find better set ups in terms of taking tighter risk, although I think that’s not a very viable aspiration. The best thing from today is that I did call it a day and moreover I didn’t let the day’s results bother me. I’m really coming on in this regard. I managed to have a fully enjoyable day off with the family and come back fresh to write this blog, go over the recording and see what can be learned.

Straight after the first trade I felt pretty bad, it was a big dent for me and my worse loss yet, I also felt very amateuristic. Here I am espousing the virtues of professional order flow trading styles and I’m accidentally getting in trades at market, but hey I’m still an amateur and it’s a lesson well learned. After the second trade I felt annoyed, the feelings from the first trade still influencing me, but after I disconnected and took a breathe I felt ok; then I learned of the terrorist attack on Westminster today and the deaths of those involved and I just felt lucky. Lucky that the worst thing to happen to me today was to lose a bit of money trading, lucky to be with my family, lucky to having the emergency services we have in this country and generally lucky to be in a position where I’m even able to attempt to learn to trade at all. To get down about trading today wouldn’t be right I feel and my heart goes out to the families of those involved.

I’m going to take the rest of the week off trading live to review a few things and get some learning done so I wish you all a prosperous, safe and happy week wherever you may be.

Cheers.

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3 thoughts on “March 22nd – Taking Losses

  1. Rhiese Macdonough says:

    hey man, been reading your page since feb and it inspired me to create my own. i like the content here and i check regularly to see if you’ve updated. i’ve collected trader blogs that i read through after the end of the trading day and it’s made for a good collection for me.

    my url is https://tradingandstuff.wordpress.com/ . the entry list is at the bottom (i only have one post so far but i’ll try to post everyday and not just about trading).

    thx again for the great content. hope to see more and with more frequency

    Like

    • Jamie says:

      Hi Rhiese,

      Thanks for the comment! Great work on starting your own page. I’ve found starting this blog to be really beneficial, it’s such a great help at getting your head straight I find. I’ll definitely check your site out and best of luck with it all. Thanks for coming back to check in regularly, I hope to progressively put more content up but I want it to be quality content too. I guess the more I trade the more I’ll post, so thats a good motivator!

      Thanks again and take care.
      -Jamie.

      Like

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