October 2 2009 Overlay, Trades, and Commentary

Prep overlay is a little offset today. Symmetry of the bars changed from AM to PM. Ninja Trader has been disappointing lately.

I had a good read for the prep this morning but traded it horribly. I made a comment in an earlier post this week that I was afraid I called a top on myself for the week on Wednesday.

It turns out I did. Some think I am joking when I make comments like that but it happens often in trading.

I was down 12 points today. Virtually 2 units (1 unit = 1 x my average loss). This is my worst single day draw in 6 weeks.

I am still profitable for the week and am coming off a decent September run. I am trying to keep everything in context.

I am always brutally honest so I am going to say that I am extremely irritated at my self as well as disappointed. I hate losing. I feel it. Especially on a Friday.

It is normal to lose money in trading. Today I lost the game as well.

I was long off the bottom this morning and short off the highs and completely screwed up the management.

Part of the problem is that I am trying to get in and out of positions more frequently but that is just not my style.

It does not mean that I can not do it. The issue is that I enter at such premium prices that usually any subsequent modification of my position only puts me into a lower probability, late sequence transaction at a worse price.

This is OK when the trade works but causes me to manage ineffectively if it starts to fail. Often risking turning a winning trade into a loss or scratch.

Also, I think I had too big of a head this morning after several days of incredibly accurate analysis.

The market has a way of humbling a trader who thinks they are doing well.

I had the long this morning but cut and and tried to reverse. I NEVER DO THAT.

I traded a setup instead of the direction. That means that I saw a short setup while I was in a long.

SETUPS DO NOT MATTER if they are contrary to your directional bias.

You can see that I read the market correctly via the prep but totally faded myself. That is right. I actually traded against myself this morning.

The second trade is so complex that I do not want to try to explain it in it's entirety this evening. It started as a simple micro breakout short of the projected inside resistance and worked. You can see what happened next.

I may have to do a video. Nine points in the green that ended up losing 6. Total crap.

I was so fired up about how the trade was unfolding that I actually left the office about 70% of the way through the trade and had lunch with another trader that was visiting.

I assumed it would stop me out and could have gotten out with a small loss but I would not risk having it work after I bailed out. I needed to get stopped out on it.

It really did not fail. Technically, it high ticked me (within a few ticks) but I refused to bet the extra $160.00 on the extreme high.

Looking back an extra $160.00 could have saved a $300.00 loss on the sequence and actually produced a $400.00 winner. ($700.00 tilt avoided by extra $160.00 bet. I was getting 4.375/1 on that $160.00).

I was not doing the math after fighting in the trade for 1.5 hours. There was a lot of manipulation at those highs.

The AM move up was ugly too.

The lesson that cost 12 points today is that keeping it simple and trading the prep without over managing would have produced a solid gain today.

More on my personal trade management style this weekend.