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.