Today was the worst day I have had yet. This sucks. Today I finished down over 7R and near 7%. I am down about 4% for the month. The main thing I did wrong today was make too many trades. The second thing I did wrong was all of my trades were shorts even though the market was up. I guess after yesterday I was biased to the short side and was only looking short.

A lot of the stocks on my watchlist setup for shorts and there were very few long setups.
I overtraded, but in a different way than usual. Usually overtrading means trying to scalp. Today it meant entering too many trades on too many different stocks. I used to have a “3 strikes and you’re out” rule which would stop me from starting any new trades once I have closed three. But I haven’t been following that rule lately. If I would have followed it today, it would have been a much better day! I would have been only down about 2R and less than 2%. I’m bringing back the rule! I swear to God I’m going to stick to this rule from now on!!
After thinking about today, I can better understand two important things that make a good trader. One is that you have to be able to get over your losses. You need to be able to psychologically withstand the pain of loss. You need to be able to trade your system even when you are down, just as you would when you are up. Second, you need to be able to create rules that you can stick to. I am working on and I have made progress with my overtrading, but I can’t seem to get it completely under control yet. Stick to your $%$#ing rules!!

This entry was posted on Thursday, August 10th, 2006 at 5:35 pm and is filed under trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.