Thursday, June 07, 2007

June 7 Trade Summary $-18k

I blew up today. I can't trade large size. I had to leave for work and left a portion of my position on and it cost me an extra 5k in losses. This is why I still have a fulltime job. For days like this. You never know when they will strike. I made many mistakes, but it doesn't matter now. I don't know what to say, and I feel nothing right now. I had a chance to exit for a profit at my target but I didn't go flat, and it cost me. I pretty much lost all of last months profit in 1 day. I leveraged myself long in at the top with no stop, and exited a large chunk of my position when I had to leave for work which happened to be at a peak selling point. I left on 6 cards, which are now 6 pts and $3,600 cut deeper into my account. I'm officially an idiot that doesn't know how to trade. This is a classic newbie mistake of trading too large of size, not using stops, and freezing up and waiting until you felt the max pain on your position. I think I need some time to recoup from this loss. I have to work a lot next week. I should have gone to bed earlier last night and planned out the day ahead of time and not put myself in this position. The only way I will be able to survive is if I trade small it looks like. I'll have to go back to the drawing board and just look to make a couple hundred dollars a day instead of thousands. How cool am I for making this post were I talk about my huge screw up were I lost 18k in 1 day.


BH_Trade on 3:01 PM said...

I also scale down bought the falling knife today, I also could have gotten out for very modest lost with that move to vwap with 45 minutes left in the day but did not. I also took large losses today and am wishfully holding length overnight. Declining volume to advancing was a staggering 16.5:1 and decliners outnumbered advancers greater than 10:1 so it was a Feb 27 type even sans "the glitch". Wonder if many dip buyers stuck in same boat . . . Needs to hold right here, right now.

DCook on 5:29 PM said...

I am sorry to hear about your trading on Thursday.

I wanted to write to thank you for the great idea about watching block trades. This has combined well with my other trading strategies and really improved my overall trading. Although I trade in a completely different manner from you, I would think all traders would benefit from this idea.

In return, my piece of advice to you is to develop a daily loss limit. All professional trading firms have this for their traders. I fully understand the thought process when down X thousand and thinking "I'll make it up". Sometimes you will and that only sets you up for this type of day. If you have a strategy that will win 18 out of 20 days, fight very hard to limit the losses on the two days it just flat doesn't work. As an example if you have 18 days with average wins of 1.4K and 2 days with average losses of 5K (a max limit down), you would still have a decent month. And really, how many times have you been down 5K and made it back? Compare that to the loss of confidence on a day like today.

I wish you great trading and look forward to reading your blog.

Glenn on 8:52 PM said...

Tough day, I understand how hard it is to share negative days, but it shows courage and integrity.

Sam on 8:59 PM said...

You win some, you lose some. Hang in there. It seems like you have the make up to learn from mistakes and become a better trader. I was in the same boat today and managed to get out in better shape (still with losses, though) than I would have if I hadn't learned from past mistakes myself. Kudos for posting on a bad day. Keep your head up.

NA on 4:15 AM said...

Dcook- fabulous advice.

When I was trading futures, prior to summer job, I had a daily loss limit of 2K. If I lost that much in a day, I would split and re-evaluate my whole game plan and x-ray to see where I went wrong.

Then I write down my mistakes two times, and stick it on my monitor. When I think I've had enough and can trade again, I do so.

You were very consistent w/ 1-2 lots. I'd say keep doing that. Fuck the 5-6 lots, who cares! If you're new, try to be consistent, don't go for the big swing- I know I did, and I got fucked.

I'm quite confident you will bounce back! Hang in there man..


HPT on 6:03 AM said...

Thanks for the comments everyone.

LP on 6:31 AM said...

Well you are more man than most people. Admitting your mistakes and sharing them openly. Because of this, you will be back on your feet. However, I would recommend that you read Trading in the Zone before you place another trade. I am confident you will get back. As hard as it may be, put this in the past and create a game plan to focus on the future.

Unknown on 7:27 AM said...

Pigs eat every day but hogs get slaughtered. We've all been there, man.

Success is how high you bounce when you hit bottom.
- General George Patton Jr

Anonymous said...

High probability trader,
I analyzed your trading performance from May 1 to June 7 as follows:
Number of trading days: 27
Number of winning days: 24
Numbe of losing days: 3
Probability of a winning day: 0.89
Probability of a losing day: 0.11
Average winning amount: $1544.71
Average losing amount: -10635.67
Your expected daily profit is

With this expected daily profit, you have made more than $5000 profits from May 1st to June 7, even with the $-18k melt down.

Since you have a positive expected daily profit, you have nothing to worry about for doing this forever. Of course, if you can reduce the current drawdown, then you will be a super trader!!

Jeppetto on 12:06 PM said...

I am truly sorry to read about your loss. However (1) I'd like to point out that if you go back and check your performace over time, you'll find it is quite impressive IMHO. Don't lose faith! (and use stop loss orders/brackt orders ...)

Anonymous said...

In his second book, Trader Vic talks about young options traders who sell options betting that volatility will revert to the mean. They say, "They just keep on buying and I just keep on selling them to the suckers." He says they will be profitable 19/20 days per month but that one day they are wrong not only wipes out their winnings but could possibily put them into debt.

Correct me if I'm wrong, but perhaps your fading volatility spikes method may resemble this risky way of trading. Just a thought.

Anonymous said...

I lost over 9k today and 50k this year trading eminis. Cutthroat business my friend.


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