Trading Out of Discipline and not Knowing How to Stop Caused Big Lost
I tend to win small but lost big. Is that a typical day trader’s fate or just me? I can not defy the temptation of the surprise gain. And of course I miss judged the market. The US market opened higher following the world. I thought the market should be trending down during the day because of the GM bankruptcy news. So when BIDU jump $9 at opening I thought it was a good opportunity to short. I took a short position at $272. I was so wrong and when it went up to $279 I increased my short position again but it went up over $287. I lost $2500 currently.
The market hardly pay attention to the GM news. In fact it seems to be celebrating it. It almost wipes out my entire gain for the past month. Just as my trade on Wells Fargo wiped out my two months of gain for about $10,000 before I started this blog I feel history is repeating itself again. I am being punished for not being discipline.
I was not convinced that this would be a bull market so I frequently took the short side. Now I am convinced that life on the long side would be a lot better. Another lesson I learn is that I don’t know how to stop. I should’ve cut my lost when BIDU went above $275 but I didn’t. I really don’t know what to do now. Let me know if you have suggestions and I would love to hear from you.
I am still holding the short position at the end. At market close my account lost $2,119.40
Account Balance Change: -$2,119.40
Related posts:
- Searching for Balance and Trying to Get Back to Discipline Following Trading Guidelines
- ADR Tends to Follow its Home Market and the World Financial Markets Tend to Echo Each Other
- The Starting Balance of Trading Account
- Trading is 90% Mental and Momentum
- Trader’s Mind is Full of Dilemma – My Thought Gone Wild With Bank of America
 |
 Digg |
 Stumbleupon |
 Del.icio.us |
 Reddit |
 Technorati |
 |
“Now I am convinced that life on the long side would be a lot better.”
Don’t be convinced yet. I have strong feeling that Tuesday will be a down day. Of course it will depend on the pending home sales data. If it is better than expected, we may see another rally (but should be less than 100 points given the wild rally today). If the data is bad, I am expecting a drop of at least 100 points. If this happens and you take a long position, that would be disaster.
Good Luck!
Thanks. The hardest thing is to guess the statistic. Guessing the statistics is no different than gambling and I did gamble big this morning in hope that the statistics came out not good.