Thursday, January 19, 2012

I thought it was a perfect execution day

Total gross profits:  $100.00 +2.00 ES points
Total trades:  5  [1 scratch]
Accuracy:  75.0%
Execution score: 90.0%
Opportunity cost: +$112.50  +2.25 ES points

At the end of the day, I thought it was yet another perfect execution day.  Yay!?!?  Upon review of my first trade tonight, I was wrong. 

The first trade, which ended up being a full stop loss (+ a few extra ticks), ended up being a trade that should have been closed with a small loss due to a reversal signal.  So that trade gets half a point ding towards my execution score.  And since it should have been closed out based on a reversal signal, I should have gone immediately long.

In other words, my -2.75 loss should really have been -0.50.  And since I missed getting on board the "correct" trade that ended up making +2.00, the true opportunity cost was +4.25.  But for the record, since I don't count missed trades, my opportunity cost will be recorded at +2.25.

In this next example, let's include the missed trade, and assuming that the rest of my day was the same, I would have ended the day +6.25 vs. the +2.00 that I actually booked.   Isn't it amazing how one simple error could drastically change the outcome of the day...or maybe not?

Add to that, a couple deliberately missed "Rogue Grove" trades (I didn't take because they were not in my trading plan) that accounted for +4.00 in potential could have been a mythical +10.00 day...on a day that I thought was not very easy to read nor trade.  If Rogue Grove continues to consistently book paper profits, he may have to make a formal appearance.

So how do I truly feel about today? 

There's no regret, no sense of revenge, no sadness, no anger.  Just a feeling from deep within which is at peace to stick with the plan, follow the process, focus on execution, and to always try and stay one step ahead on the next potential trade.  And I know that if I continue to do so and minimize my errors, the P&L will most certainly improve.

As I continue down this journey to challenge myself to improve every day, it won't be very long before I begin seeing some +10.00 days make an occasional appearance.


Anonymous said...
Hi grove,
Maybe you are interest in the free kindle book.
bye Hector

Grove Under said...

Hi Hector,

Thanks much for the link -- I need all the help I can get with my brain, that's for sure!