(Bad) Trade Review

I made all kinds of mistakes day-trading today.

  • Bad start too early. Without much planning, I shorted at (1) during the first 10 minutes thinking 124.50 would be revisited.  It ended in disaster and set the tone (and psyche) for the rest of the day.
  • Over-trade.  I made over 30 round trip trades on SPY today.  What?!  Much was due to “fire-fighting” bad entries.  The goal of fire fighting is to reduce loss.  I might as well not trade and and be better off  and not incur any loss at all (just making a point to not enter a trade too quickly).
  • Not honoring stop loss.  After entering short at (1), I kept moving the stop loss up.  Initially at the top of the entry bar; then I moved it up to the previous day’s high.
  • I entered long at (2) thinking it was an H1.  That was a mistake because the up trend channel was broken and there was a moving average gap.
  • Average down.  Well that’s part of “fire fighting”.   I ended up shorting on the way up and buying on the way down during the first 2 legs of the day.
  • One thing I did right was after the 2nd leg (down channel) was broken, I didn’t go long immediately but waited for the bottoming pattern.  See the magenta line, I went long on the break of it.
  • I went short on (3) thinking it was L1.   Here I made the mistake that I avoided earlier.  The trend was up (or no trend) and I should have waited for a back-test before making counter-trend trades.
  • I took loss at (4) for my short entry made at (3).  Why???  May be I had enough for the day?  Or may be I should have given a little bit more margin to allow overshoot?   Actually, it had much to do with the fact I was in the middle of taking profit of my NFLX day trade.
  • Distraction. So the NFLX day trade distraction did a double whammy.  First, I prematurely took loss on SPY at a pivot in order to get to NFLX.  I did that subconciously to avoid a potential disaster on the SPY trade. Second, I ended up taking profit way too early on NFLX as I exit the trade in a hurry.

Bad trades.  Bad day.  Fortunately, the lessons only cost me $110 for the day.

Incidentally in preparation for the upcoming gloom and doom, I bought a McDonald deal today from Living Social. $13 for 5 Big Macs and 5 Large Fries.  Vouchers have no expiration dates which reminded me of forever stamps, which I bought a couple of books in case postage goes up with hyperinflation.  LOL.

 

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2 Responses to (Bad) Trade Review

  1. uday says:

    Analyzing your trading day is the first step towards becoming a good trader.
    I would strongly recommend that you do paper trades until you get a good handle on a particular strategy. Trading is difficult and it took me 3-4 years to be comfortable/good at it.
    Day trading is difficult and you always end up chasing prices. Instead, weekly trades are more profitable. There is a good runway to correct your mistakes.
    All the best….

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