Wednesday, October 10, 2007

"Mindfucked" By DSL

I hit my limit today, right before the market bounced hard from the bottom. It's 3:07 right now and I'm just watching everything go straight up.

I'm pissed.

Here's a good trading rule to abide by:

If you're losing money trading 300 share lots, you'll lose 10x as much trading 3000 share lots.

That's where discipline comes in.

What happened today is that I came into the day all out of sorts because DSL was gapping down and I was long 300 in my swing account.



I'm out of my position at a loss of $1800+. That smarts.

So that more or less fucked with my head. I felt like I had to "make it back." Instead, all I did was dig myself deeper. I lost another $600 daytrading DSL. So for the day, swing and daytrading accounts combined, my grand total loss in this stock was $2400.

This is the first time that I've taken a big loss in my swing account and let it bleed over into my daytrading. I need to keep those two accounts mentally separated. I think that's very important.

Besides DSL, the rest of my day was awful too. Because I was trying to "make it back" all day, I was overtrading and trying to manufacture gains where there were none to be had.

In short, I sucked today. Plus I have some weird neck injury. And now, a phantom limb problem... despite the fact that I'm not an amputee.

I'm going right back into slump mode. Since Thursday of last week I've dropped about 4 grand. So for the rest of the week I'm going to follow trading rules very tightly and practice patience. I'm still up for the month, so I don't want to get myself too mindfucked right before earnings season begins. I can still have a very good month if I isolate the stupidity to the last few days.

Also, Judy taught her first (regularly scheduled) yoga class for kids today. Right when she left (when I went into babysitter mode) I built a few short positions in the shippers which promptly reversed. I just wasn't able to be attentive enough to get out of the positions in time and they pushed me over the edge.

Now the market is going straight up... I bet it closes positive. Shoot me... a reversal day and I'm watching from the sidelines. Meanwhile, volume is pathetic, especially for a reversal day. That's just odd.

Tonight I'm going to do something I don't normally do... drink beer and watch the Islanders beat up on the Rangers. Perhaps if I drink beer and watch sports it will get me in the proper mindset for trading...

Here's the stats:

P&L, -$1206
Best, ANW
$289
Worst, DSL
-$596

41,800 shares traded.
15 stocks traded, 5 winners, 10 losers.
156 trades.


UPDATE: The market mostly topped out when I was writing this post. Since I really felt it was going "unched" it tells you how off I was today. Thank goodness I stuck to my loss limits.

9 comments:

TraderCaddy said...

It seems like the best course of action (for me anyway) for the last two weeks has been to daytrade the first hour or so and the last hour and a half. Get in and get out. The middle of the day has been chop, chop, and losers.

Dinosaur Trader said...

Yeah, mornings have been good to me... it's been smart to get away.

Today, I just got hit early and couldn't really get over it.

-DT

artha said...

DT,

Sorry to hear of your trading losses. It does sound like the swing trade loss messed up your psyche today.

Going forward, you might want to consider building up your swing account portfolio by sector diversifying and position sizing, to soften the impact of unexpected gap ups/downs. And I would hold the less volatile stocks - I have to admit I thought you were nuts holding LDK and JRJC as swing trades, even though it worked out in your favor.

However, I have no doubt you will be back on track in no time.

BTW, avoid revenge trades, they rarely pay. Just ask me. :(

OBAT said...

Sounds like my day. Gotta stop this revenge trading crap. Let's make a comeback Thursday.

Dinosaur Trader said...

artha,

Good points. For the record, LDK and DSL both pre-announced. I wouldn't have held them going into earnings... in both cases I got caught in pre-announcements. One worked out, one didn't...

Also, you're dead on about revenge trades. In fact, I have something funny to say about that. Maybe I'll write a quick post.

Finally, the reason I've focused on more volatile stocks is that I want to be in "movers." However, I think you're right that I should build my account with less volatile names.

Thanks as always, artha.

-DT

Dinosaur Trader said...

OBAT,

I think if I tallied the amount I've lost in revenge trades since I started this blog it would be over $10,000. That should be enough to teach me to stop.

Sorry about your day.

-DT

artha said...

DT,

Yes, I dread those negative pre-announcements. Why can't those guys keep their mouth shut until earnings date?

Recently I got caught in the NTRI pre-announcement. It was in a long term account, so while the $15/share drop really sucked, it was a small % of the overall portfolio. The funny thing is I had debated between buying NTRI or PNRA. I guess Americans prefer gorging cuz PNRA is up $8 from my "shoulda" buy point.

Dinosaur Trader said...

artha,

Well, as "the Fly" says, don't bet against the fat man.

-DT

Dinosaur Trader said...

artha,

Well, as "the Fly" says, don't bet against the fat man.

-DT