I think as an intraday trader you have to have amnesia. What do I mean. Well for anyone new starting out in day trading you can fell in increase in urgency and anxiety. And it can be quite discouraging having loosing trade after loosing trade. But one thing you have to be cognicent about is that your past trades have no barring what so ever on you next trade. You can only focus on one trade at a time. I think that it is all to easy to create a downward spiral when trading intraday, or any timefram for that matter.
Today was a perfect example. I was trading DISH and I had identified 20 as an important level. So on the break of 20 my plan was to get short for about a point move to the downside. It brok 20 support so I initiated my short at 19.99, my orignal exit was a break back above 20 covering at .01-.03 depending how fast I was. Well the stock did not go down right away so I covered for even money. That was my first mistake, I did not give this stock any room to breath. It never traded above 20 going into its 1.01 downmove to 19.02. I was pissed that I had covered my dream entry too soon. So I stepped back and re-evaluated the trade to find another good entry letting my last trade hover like a lightning cloud. I decide that the break of 20 was confirmation of my bias and that I would be even more confident if the days low at 19.85 was taken out that this baby was going to 19. The risk/reward was still good risking about .06 to make .85. So I got short at .84 setting a stop at .91. But again I was inpatient and covered at .77 dwelling on the fact that I left .15 on the table and the best entry for this trade. So moral of the story is don't let past trades effect your judgment on the trade you are in. I am not saying don't use information from past trades to guide you but I let this negative feeling affect my trading.
Not sure If I was clear or not but I think you get the idea of what I am trying to say. Don't let past trades affect future ones!
Today was a frustrating day as I was always a "Day late and a dollar short", so to speak on my entries and exits.
I hear what you're saying. It's easier said than done. I think learning to do this is what separates succesful traders from traders that lose money. I don't yet trade often enough to have this problem, but I have suffered from getting gunshy due to the last trade not working out. I also have suffered in the past from getting to confident and feeling like I can branch out in to other names or with bigger positions because my confidence is up.
ReplyDeleteThis is why a system is needed, and I'll look to employ one once I'm trading more often.
Don't feel too bad. I put on about 10 trades today. 3 were MGM, 3 were PALM and a few others but as I posted before the MGM ones worked well for me and I was up about $50 and feeling good. Then I got monofocused and OCD about PALM and took on 3 bad trades at different levels of support believing that the stock would hold and bounce but the market seemed to be just churning lower at a very slow pace so I just cashed out at a total $70 loss = $23 down for the day. Decided to work on something that was working: finishing up the paver stone tiles on the patio at my Irvine condo. Mission accomplished. Will tune in tomorrow morning to watch a few tickers: XOP, COP, NBR, basically the whole oil service sector, possibly buy some long CIT, D and a few others. Good night
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