Today I was upset with myself. Why? Because I broke one of my new trading rules.
Recently, I made a rule “Do not Loose More than 50$ per day, and if you do, stop trading for that day”. However, this morning I entered a trade pre-market, carried it into the open, and saw it drop. I lost 54$. No biggie. I have been on my best winning streak ever, so this was bound to happen. However, what did I do next? I hit the “biggest gainers” chart, selected the newest gainer with high volume, and impulsively entered a position. Despite going green for a minute or so, it ended up tanking, so I lost another 50$. If I had not “revenged traded”, and had stuck to my “daily loss limit”, I would have had a smaller loss.
Additionally, my 2nd trade was more than my lot limit (currently 100 shares).
So really, I broke three rules today:
- Exceeded daily loss limit.
- Revenge Traded
- Exceeded current lot size.
That is why I don’t feel good about today’s trading.
I would have felt fine with my 1st loss, because it was expected and followed the rules.
Instead, a little voice said “you can win back your losses!!”. Bad advice.
I certainly hope I learn from todays mistakes.
Perhaps there was some over confidence that contributed to the rule breaking above!
See you tomorrow!
P.S. I also was trading LONG on a red day. My system flow chart suggests a SHORT on days where futures are red, and early main index candles are red. Another mistake today!
P.P.S I also was buying a stock that DID NOT have a strong demand story. The shares traded was just a small percentage of float! Next time I got long, I want to see a strong demand story! The float needs to be trading over and over!