Monday, April 2, 2012

How many warning flags does it take?

Total gross profits:  $-825.00  -16.50 ES points
Total trades:  10 [1 scratch]
Accuracy:  11.1%
Execution score: 27.2%
Opportunity cost: $+625.00  +12.50 ES points
   <-  It should have been
         about a -4.00 day

Late last week on short notice, my mother's burial was scheduled for today due to some botched up planning by the cemetery.  Unfortunately, I couldn't fly across the country at the last minute due to my family, which is probably something my mother would have wholeheartedly supported.  But still, it's not a good feeling to miss out on something like that.  Warning flag.

Early this morning, I saw a setup that ended up working but couldn't take it since it was the time to get the kids ready.  Of course, it worked.  And after I returned from working out and was getting my charts setup, I saw another setup or two that worked.  It was a good to know I was seeing setups that worked and was feeling confident for a solid day, although there was a slight sense of missing out.  Warning flag.

But then it appeared that a trend day up was starting as potential signals came up to short the market.  I kept saying this looks bullish, but kept shorting.  I couldn't pass them up, because they were valid signals, as well as my fear of missing out.  Internal conflicts.  Warning flag.

Before you know it, I had 2 full stop losses and I said I should quit here after being down about -4.50 ES points.  They were based on valid signals per my plan, but I wasn't pleased.  Warning flag.

I entered another trade and yes, it was a short against the trend, and I started to say shortly thereafter how it looked bullish.  Around this time, my sister called distraught about my mother's burial service -- the funeral home gave us the wrong urn -- it wasn't the ashes of my mom.  Ooops!  Warning flag.

Fast forward to about 3:10 PM, when I exited a 2 hour short trade with a small loss -- only 2 ticks below the high of the day.  Ugh.  Had I kept my original stop, I would have been fine.  Yet another warning flag.

OK...deep breath...no revenge trades, no rogue trades, no revenge trades, no rogue trades...


At 3:12 PM, I went long for the first time.  And I kept scaling in and getting stopped out.  At 3:30 PM, I got a sell signal, didn't want to believe it, and kept buying, even when the critical swing low got taken out. 

After missing the buy side all day, I must have been trying to make up for lost profits.  After I finally scaled out and went even, this one revenge trade campaign cost me -8.25 ES points, and my opportunity cost on this single trade was a whopping +10.00 ES points.  Crushing.  That might just be an all time record.

So, did the personal issues at hand help make this trading situation worse?  Perhaps.  Maybe I was taking out my frustrations at the market.  But had I done well, I could also have said that I was bolstered by the personal issues and how I rose to the occasion on yet another comeback.

But the bottom line is that this was a day where there were enough warning flags, one after another, to either not trade at all or to just stop early.  Instead, I didn't listen to my inner voice.  How many flags does it take to make me change my behavior?  I must to do a better job of self-managing myself, otherwise I will have a short trading career.

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