Wednesday Wrapup (1/13/10) - $3,788 Loss

4:00 PM
Wow where does one even find the words.  I'm embarrassed to write this post, but I suppose that's the point. Yes, that's not a misprint, I lost $3800 today.  Regardless of one's account balance that's a big number, about half of what I expect to make in an average month.

I've had these days before, and I'm sure this won't be the last.  In a game of seconds one bad decision is all that separates a trader from huge wins or losses.  And today I just wasn't sharp enough.  Even last night I sensed that I might need to scale back until I got a handle on the current market action.

As for the day's events my first 3 trades were pretty much a wash.  Lost on the first two countertrend long setups, but gained all that back on the third.  Note that these were all re-entries of the same setup as I figured we'd bounce off the lows.  Turns out I was right, but only captured a small part of the move.

Where I dug my grave was on a countertrend short setup at 11:13AM.  After a few minutes it was evident that the trade was going no where so I started orders to exit the trade at a decent price (which at the time may have been a minimal loss of say $100).  Got filled on my first limit order, and then the big trade hit.  Sure everyone saw it on their charts.  200K + contracts traded hands and the market shot higher with me short.  What's worse is that I added to the trade higher like an idiot thinking that a top had formed after that huge volume spike. Looking back it was a decent CT setup as my 1st tgt was hit easily, but I was jaded on my risk management due to have an existing short position on. From there I was pretty much was a deer in the headlights.  I rode the trend up all day long still firmly believing we would reverse.  And in the back of my head I knew that I was relying on hope, but was paralyzed.

I'm only thankful the market reversed slightly near the EOD because it could've and should've been much worse.  I'll return tomorrow trading 1/2 size and will continue to do so until I have a good feeling of the market structure. Let's hope this is the most embarassing post I ever have to write in this blog.