This blog is, among other things, my mirror. It allows me to self-reflect, because the judging eyes of tens of thousands of people are on me. It forces me to be honest with myself, and it forces me to confess when I've screwed up or toot my trumpet when I've done really well.
I beat myself up over mistakes for a few reasons:
- It demonstrates the credibility and transparency of this forum;
- It allows me to use the act of writing as both a catharsis and a diagnostic tool for my trading;
- It gives us the collective opportunity to learn.
In this morning's post, I pointed out a shorting opportunity on the /ES; from what I could see, it was muscling its way up to about 821. That assessment was absolutely right, and Yay Me for saying so.
However, I was too nervous that the market would "get away from me" and start falling fast, so I rushed in and shorted 40 contracts at 815, violating my rule about waiting until 30 minutes had gone by. (Of the Holy Three Rules, this is the one I am usually best about following). The market pushed up to 820.50, very close to the 30 minute mark, and then started falling away.
After falling to 804, I got out with a nice profit, but my gun-jumping did a couple of bad things:
- It reduced my profit; an entry at 820 versus an entry at 815 with 40 contracts is a profit difference of $10,000;
- It caused undue anxiety, since I had to "suffer" a $10,000 virtual loss before the market turned around
All's well that ends well, but I made a mistake, and dumb luck kept me from getting hurt too badly (the foregone $10,000 profit notwithstanding). Below I have shown my entry point, with an arrow, and the logical entry point, with a circle.
