Friday, August 12, 2011

End of week review

A recap of week ending 8/12/2011.
  • Very volatile week, but I was actually doing pretty well, that is, until today.
  • Monday, Tuesday, and Wednesday were profitable days, with selective trades and good returns.  I was up about 19R post commissions (R=my average $ risked per trade), with about 65% accuracy.  
  • My overall portfolio as of close on Wednesday was up nearly 4%, while risking less than 20 basis points (.2%) per trade.  My execution and stock selection wasn't necessarily great, either, so the figures could have been even better.  
  • However, Thursday the cracks started to show and due to some overtrading, losses erased all of Wednesday's gains.
  • Friday, the morning was a scratch, but the rest of the day turned into a chopfest in a choppy market.  A touch more than my entire profits made earlier in the week was gone.
  • Ended up scratching/slightly down for the week
Should have known better...
What's most disappointing is not the actual loss for the week, which is really nothing considering how much worse it could have been during this unusual week.  But the fact that I should have known better, (especially after going through hundreds of my previous trades this past week) that trading in choppy markets can be a disaster for me.  I'm so disappointed and demoralized with myself, but I'm very lucky that I didn't end up with a significant loss!

Is overtrading bad?
I hear and use the term, "overtrading", quite often, usually in a negative context.  However, if your trading style is that of a scalper, profitably averaging hundreds of trades a day, is that a sign of overtrading?  One consideration is that maybe I need to learn how to scalp trade.  The techniques are quite different than the standard Trader-X methods, so perhaps this is a sign that I need to make the efforts to discover whether this is something that could be a strength. 

What changed starting Thursday?
Up through Wednesday, I was holding a profitable EURCHF forex swing trade position.  For some reason, it could be that knowing I had something profitable on the table took some of the anxiety away from having to "get in the market."  I would glance at the profit from the forex trade, and that helped me to stay out of anything less than a B rated setup.  I'll need to work on changing that mindset.

I continue to do well controlling my actual $'s risk.  A stop might get adjusted a few cents, but never have I ignored a stop loss, or let a loss of trade get out of control.  This is a strength that I am certain I possess, and my performance has proved it.  Another positive is that for the first few days this week, I took some good setups, and managed many of the trades very well.  And finally, I have finally completed the updating of my trading journal on 

Warning signs -- overconfidence?
After Wednesday's close, I was actually feel quite confident and excited about my potential for trading.  But maybe I let a little too much confidence make me sloppy.  So I'm going to take all of this in over the weekend, and prepare myself for new week with much better results!

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