As the holiday season approaches, stress levels can increase significantly, which can then easily spill over into your trading. It's so important to be in the right frame of mind to trade, and I've had first hand experience with NOT following this basic and common sense rule. Combine elevated stress with additional external factors, and your flash point can be easily reached -- just like what recently happened to me.
Tuesday 12/20: -13.00 (OUCH!)
On Tuesday, 12/20, my toddler daughter was sick and wasn't allowed to go
back to daycare for 24 hours. So I thought I would be SUPER DAD and
occasionally peek at the market to put in one successful trade after another while keeping my daughter entertained and comforted, resulting in a
win-win for everyone! WRONG!
Tuesday turned into a very bad day and I lost -13 ES points after being down as much as -19. As my mental
frame of mind became more and more agitated and irate with both being
wrong with my trades, along with trying to deal with a daughter that
wasn't really that sick and wanted all of my attention, it was a bad
lose-lose combination for everyone.
You name the rule, and I broke it. And it was all my fault for
thinking I could pull this off. What was I thinking? I essentially lost all of my profits from the past 2 weeks, all in a single day.
Wednesday 12/21: +8 (morning session only)
Whereas today, I started the day with a +3.25 profit
from the overnight session, which gave me a nice little cushion
(especially mentally) to start the day. After my first trade of the day
was a loser, my next trade went as much as +8 in profits, but closed it
out with only +2.50. A bit deflating.
So what did my mind tell me to do after a negative experience? I took a revenge trade only minutes
after that prior trade, ended up being a full stop, and decided to settle down and
regroup. I kept looking for good setups and ended up being up +8 in the
I left and went out to lunch, and decided not to trade again so that I
can be guaranteed of a +8 day as well as prepare for my in-laws arriving tonight. And as expected, I had at least +6 or more in
missed trade opportunities.
The in-laws effect
Since my in-laws are coming into town tonight, I don't have time to do
my usual trade review to calculate my execution score and opportunity costs, so that will have to wait.
I will not likely
be trading tomorrow, especially since I'm sure my stress levels will be
way too high with the in-laws roaming around. Just imagine the effect
that the spillover from the additional in-law related stress would cause
on my trading performance!
Maybe I'm finally learning to be a little smarter about when NOT to trade.