Thursday, August 30, 2007

Trading Results for Thursday

made -5.5 pts yesterday.
made +6.25 pts today.

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Today's most interesting trade was where I played the double top. It looks like an obvious double top in hindsight, but in real-time, I was sweating it out, and wondering if I made the right decision. I kept nervously watching out for any signs that it would reverse on me - we just had a significant 10pt run-up, and I had no clue about the news about the terrorist alert at the UN building.
But it wasn't just because of the double top formation that led me to short. I also observed that Monday's lows were around 1470-1473 area, so I inferred that the prior support in the 1470-73 zone should now be resistance. The more technical reasons and indicators that you have lining up in your favour, the better.
The other post-mortem on this trade was that I took profits @1465, but at that point, I only needed to risk about 1.25pts of profit in order to achieve my profit target of 1460. The retrace that I had anticipated did not show up at all - which is unusual in itself, this 12pt drop had no retrace at all !! Just a reminder to myself to measure and evaluate the risk-reward of the trade at all times, it will help to extract more profits and less loss from a trade.

Yesterday was discouraging because I succumbed to overtrading again, once I saw that I missed out on the run-up. I was so disgusted that I did not bother making a post to this trading journal. I hate it when I do that, and I continue to search for ways to stop myself from overtrading. Monroe Trout remarked once that he was never able to get rid of his anger whenever he lost big on a trade. But I've also read in another trading book that you can turn the tendency to overtrade into a positive. How would I do that? I will have to find that trading book again to re-read what it had to say.

Today I was much better, since I usually don't overtrade 2 days in a row. Maybe it was because of the full moon yesterday, I don't really know why sometimes I just overtrade, and sometimes I just don't.
The one thing I observed about myself today was that I didn't get down on myself when I incurred the small losses in the morning. Making it back with that one big trade certainly helped to put me in a better state of mind, and the rest of the afternoon, I was picking off 2 or 3 tick low risk scalps.

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