One Year, What a Journey
August 12th, 2018 | 6 minute read (Repost from We The Market)
One Year of Trading. Woot! They say survive long enough to stay in the game. I did, but barely. I was planning on writing this article a few weeks back. I had reached a rookie nirvana where I thought the stock market was a personal ATM machine. I was flying high as a kite. Then reality struck and I lost in three days what took me six weeks to build up.
My emotions are like a snow ball rolling down the hill collecting more snow the further it travels until finally smashing into a wall and exploding. This analogy applies to both positive and negative events. There was one day where whatever stock I jumped into, the stock turned to gold. I traded 10 stocks with 100% accuracy. At that point I became curious as to how many more trades I can make with positive return. Nope, 10 was it and the next three trades on 8-02-2018 turned out bad but at least with minimal losses. I made over 2% that day.
Just as things are good they quickly turn against me. However, I thought I was done being a rookie. The market told me I am just an infant at this juncture. After a year of trading I find I am good at technicals but I am not good when my emotions take over and lie to me. I almost just wrote I am not good at losing but in the last six weeks I started the morning down and then recovered for a profit. I would think this would mean I keep a cool head on while not performing optimal and fight back for a winning day. This can be problematic. Anyone reading this would say, what is wrong with fighting back for a win?
Flexing your brain muscles and programming yourself to trade optimal after an early morning loss would have you believe you will always recover from a loss. August 7th – 10th was a complete ass kicker where I could not recover from my morning losses. I could not put my finger on it. Monday I rocked it. Starting Tuesday, the snow ball starting rolling downhill until Friday it smashed into the wall. My attitude was negative and doubtful. I wanted to recover but I couldn’t pull it together.
I have the grit and fortitude to continue on. I am at breakeven right now and any lower I violate the PDT rule. I will not be able to trade like a day trader. Where to go from here? Figure out what was working and what was not. What was working: Patiently waiting for an entry, Test the trade with small position size, if not working get out to minimize loss, take profits. What was not working: Impatient, revenge trading when losing, large positions and not stepping back for a break when things are not going for me. What I could have done last Wednesday was traded in a simulator / paper trading. Fear of Missing Out (FOMO) is what kept me going but unfortunately with a poor attitude and an I can make up my losses by going big or go home. Well, I went home with a loss.
As I start Monday again I will be very cautious and trade small and few stocks. My demeanor is good and I know I can do this. The last six weeks have been, perhaps, a glimpse into my future how I can trade like a pro. The last three days is a fact I am still a rookie hoping to join the big leagues someday. You can’t control your emotions but you can acknowledge them and keep them at sleeves length. What does that mean? In my case I would say my trades are poor because I am emotional about my losses. Acknowledge my behavior, attitude and emotions and change it up. Don’t trade, take a break.
My prayer for this blog is that my mistakes can help someone else with their Day Trading Journey.