When I make mistakes, I talk about it on this blog. I do this for a few reasons:
- To demonstrate the honesty and transparency of this blog;
- To flagellate myself publicly so I can try to avoid doing it again;
- To try to teach others by my mistakes
So what was my mistake today? Simple: I quickly sold out my positions in SSO, UWM, and DBA very soon after the market opened.
By doing so, I violated not just one but all three of my Three Rules! Specifically:
- I removed the stop prices in order to liquidate the securities, thus violating my first rule to always have a stop in place;
- I exited of my own volition, instead of via stop price, thus violating my second rule dictating the only exit price is a stop price;
- I did the trade only a few minutes into the day, thus violating my rule to be completely inactive during the first thirty minutes of the trading session.
Because I track my positions even after they are closed, I know precisely how much money I would have had in extra profits just at the end of today from these three positions:
DBA………..$9,700
UWM………$10,500
SSO……….$7,600
Yep, that's $27,800 in punishment from the trading gods. And I deserve the punishment!
I go through this exercise for the reasons cited above. I am about to push into Thanksgiving Prep Mode, so this will probably be my last post of the day, particularly since I have nothing particularly pithy to say about the markets. I regard today as very much a countertrend rally, but I absolutely accept that it could push higher. Only if we break above the November 4th highs will I consider that Something Big Has Changed.
Anyway. Obey the rules. I didn't, and I paid for it. Don't be like that, or else you'll be sorry.
