Right idea + bad execution = losses

This isn’t a new concept.  In fact, it can be applied to many facets of business and life in general.  The beautiful thing about trading is that the feedback loop is much faster than real life.  Similarly to sports, trading decisions have a way to dig into your gut very quickly and test your fortitude, stamina, and discipline.

Recently, I’ve seen consistent losses and missed oppoortunities despite having the right trade idea.  Here is a quick list of some of them:

Screen Shot 2018-04-11 at 11.09.26 AM

With the exception of the gambles I was taking in the E-mini (S&P 500 futures) due to its volatility, all the other positions were prime for a trade in line with my trading plan. Also, I would have stayed in Silver, which I botched this morning (see Update on 4/11/18 here).  The plan, with the account size I currently have, is letting me stay in trades 1-4 days.  Rarely more than a week.  I would have risked between $400 and $750 and waited until the end of the day to decide my if to stay in or exit the trade. Yet, on these days, (clearly April 2nd was a bad day!!!) I just didn’t execute it.

If I had just waited for the close of the day to make my final decision, I would have pocketed $7,074 instead of $174.

If I had waited for 2 to 4 days, I could have made $12,630!!!

The stops I had in place initially were never challenged. To be completely fair, I probably would have adjusted my stops as the trade moved in my direction, which makes the $12.6K figure not as likely.   But still, somewhere between $6K and $12K is a big difference from $174!

That’s what trading futures can do.  The enormous leverage inherent in these contracts can make for quick profits.  Lots of experience and a solid trading plan are required.  Then, the number one ingredient for a discretionary trader is discipline to execute that plan.  The process of becoming more disciplined NEVER ends! 

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