Wednesday, April 4, 2012

The fatigue factor

Total gross profits:  $-75.00  -1.50 ES points
Total trades:  17 [4 scratch]
Accuracy:  46.2%
Execution score: tbd%
Opportunity cost: $tbd 

Today was yet another day where I had a "no-duhhh" moment.  Although I've been daytrading nearly a year now, it's only today that I realized I can't trade without having a meaningful break during the trading day. 

But maybe it's because I got a bit less sleep than usual for the 2nd night in a row, I really felt the effect of fatigue today.  I was trading nearly non-stop from 8:30 AM until 4:15 PM, with maybe a few minute break several times throughout the day. 

I was doing fine in the morning and felt pretty good about trading with the new setups in my trading plan.  My performance in the morning to the early afternoon wasn't bad, and there were some more errors than usual with some of the scalp setups I tried out.  But as the afternoon progressed, I realized that my ability to make decisions and to interpret the charts for signals began to diminish.

My vision turned into tunnel vision, the wheels started to wobble, and I caught myself moving my trailing stops in much sooner and tighter than usual.  I started to tune out the rest of the world.  And before you know it, a +5.00 ES points day that was pretty much locked up in the final hour turned into a -1.50 loss in practically minutes. 

My tired mind said to go for a strong finish into the close with profits after having a few frustrating breakeven trades, I listened, and I doubled up.  However, instead of having a strong finish, it turned into a wipeout of my profits for the day.  The ultimate ANTI-comeback day.  Casino style gambling at its finest.

At least I realized what took place today and how most of my revenge trading has taken place late in the afternoon, most notably in the 3:00 PM hour.  I now realize that fatigue is one key trigger to rogue and revenge trading.  Now that I'm aware of this, I will take steps to control this situation.


Anonymous said...

Dude...17 trades? Are you trying to be a market maker? That is an insane amount of trades for a beginner to be taking. Why not just take 2 or 3 juicy trades a day and call it quits?

Grove Under said...

Great point, the numbers support you. In March, on my winning days, I took an average of 3.5 trade. Losing days, average of 14 trades. Huge difference.

However, the valid scalp trades I attempted were nearly 90% accurate with an average gain of nearly $30/contract.

Only problem? I get on a roll from all the activity, lose discretion, and start taking bad setups.

Thanks for your observation and calling it out, very much appreciated. It really does help me to take a much closer look, I have thick skull syndrome, and every bit helps.