Wednesday, February 21, 2007

Wednesday's Trading Results

Dear Trading Journal,

Please grant me the strength to keep my promises.....

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Current holdings:

GS Mar07 230 Calls @2.20 (sold my previous calls at a loss, but got sucked back in again today, yes I am a masochist).
Only one single NMX Mar07 140 Call @2.90 (the bad trades on GS calls made me fearful of taking on a normal position size).
OMG @50.95 @16.32 (trades as AUY on the AMEX).
JADE @9.55

I've been thinking lately about why I am so prone to overtrading. My current theory is that as the trading session progresses, my ability to discern a good setup from a bad setup starts to decrease. Then add that to the potent combination of impatience, fear of missing out on some great run-ups (like GROW this afternoon) and an urge to trade something. There's a ton of ideas from the various sources that I track (my sources of stock ideas are listed in my blogroll), and it seems I want to catch every single great idea. But of course, I can't be everywhere and watch everything at once. With that in mind, it becomes easy to see why I start to lose discipline after a few hours into the trading session.

Time to regroup. I will break away from my usual routine of gathering stock ideas form my sources tonight, so there will be no new stocks to add to my watchlist (except for GROW can't miss out on that one!). I also won't be actively looking for setups during the trading session. So, I will just watch my existing positions, and whatever is already in my current watch list.

If I miss out on another JADE or DNDN type of run-up during tomorrow's session, so be it, because at this point, I feel that the need to re-learn some discipline is more important than chasing dollars. Sort of like learning to walk before I run a marathon sort of mindset.

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