Saturday, December 10, 2011

Rogue trades appeared, but luck was on my side

Friday, December 9
Total gross profits:  $262.50  +5.25 ES points
Total trades:  15  [2 scratch]
Accuracy:  69.2%

The morning started strong and had I just stuck to my +2 profit target mentality, I could have had 5 winners with +2 in a row, before getting my a full stop loss.

But I believe there was a bit of greed that came into the picture, since the trades I tried to let run were Diamond Setups chatroom alerts (they often run for much more than +2), and so with lack of sleep the night prior, I was not as mentally strong to stay disciplined to my plan.

Of the 15 trades I took today...
1 was an error I didn't expect (confirmation was accidentally off on my DOM)
1 was a decent setup, but in hindsight, not according to my plan
2 were flat out rogue trades. These were most disturbing to me.

Without those erroneous trades, I would have had about 11 trades, which seems like a nice sweet spot for my personality and style.
I broke down
I was doing so well this week with my discipline of sticking to the plan, but after a full stop loss during the lunch hour, I entered a couple rogue trades, fully aware that it was not a part of my plan. This was disturbing.  Old revenge habits came back.  But I became aware of it, and stopped before it got out of hand.

Lack of sleep combined with end of week fatigue is not a good combination. Perhaps  I'll need to consider ending the trading early on Friday.  And if tired from a lack of sleep, I will need to find a way to walk away and avoid trading.

My opportunity cost
+6.50. If I would have simply exited at a profit target of +2, I would have made +6.50 more to my +5.25 day.

So, +11.75 is what I could have made today had I been more disciplined in simply exiting at my primary target of +2.

What's very surprising is that my rogue or trades taken in error were actually either breakeven, or even had an opportunity for decent profits. This is unusual, since in my experience, they usually hurt you a lot. I will credit luck.

But overall, this wasn't a bad way to end my first week back trading live.  I'll take it.

No comments: