After my three days of trying to follow my trading rules, I’ve decided that I need them because I become too emotional with price fluctuations and about entering trades because I don’t want to miss moves. Yes, this is paper money too!
If you look at the chart below, I only followed my rules 100% on 1 of 16 trades! I did NOT develop a positive behavior chain. One reason was because I was still focusing on “making money” rather than the process outcomes of following trading guidelines. Yesterday, instead of looking at charts during the big reversal, I was looking at my simulated profit and loss statement in my paper account. This is ludicrous. I’m too focused on my little track record chart showing my progress, and it effected me today as it has for awhile. So to counter this, I’m not going to keep a running total of my profits and losses, and I’m not going to give a monetary value to the trades – I’m going to measure them by price moves, similar to what Blue Collar Trader does. Later on, I can add it all up if I want.
Most of all, I’ve realized I’m not going to be able to follow 100% of the rules 100% of the time – at least not right away. So I’m going to start with baby steps, and tackle my biggest problem – NOT staying in trades long enough for them to become profitable or letting them to run to create real winners. So I’m still going to follow my little worksheet – but the the primary rule and the only rule I’m going to track in the coming weeks week will be my EXIT RULES. I will write them up over the weekend in a detailed post, and my ONLY goal next week is to follow them 100%. I don’t care if all my trades are losing.
Today was not good. Yesterday’s gains made me bold playing with house money and tried my hand on holding an EFT overnight. I will never do that again. Lesson learned with paper money. The rest of the trades were decent, but I exited way too soon on several of them, including ARWA. My longs of GNW and NCX really had no entry signals on them, I thought the market was going to do a sharp reversal and it failed to do so (looks like its starting to do it right now around 1:45pmish). Today’s trades:
||-.25||L||Follow rule of not holding ETFs overnight|
|ARWA||-.03||S||Follow exit rule would of been .35 gain|
|GNW||-.09||L||Bought at resistance of $2.50|
|MELA||+.25||L||Need to tweak exit rules on gap ups|
|PALM||-.27||L||Do not buy at 52 week high|
|RVI||+.18||S||Follow exit rule would have been .24 gain|
|MTG||-.03||S||Follow exit rule would have been .04 gain|
|NCX||-.09||L||No entry signals, emotional buy|
|JNY||-.03||S||At least break even if follow rules|
|LOOP||+.15||S||May have been more but quit for the day|