Friday, April 5, 2013

Final thoughts on this week

Wow, what a horrible end to an amazing week? All sorts of winners until Thursday morning, then I blow up with 2 losses on ZB, and another nice loss on NG.

Here's a classic example of what is wrong with my trading. Last night, I post this chart -

So NG is in a channel, and at the top of the channel? Channels are not at all part of my trading setups, but OK, its at the top of the channel so I short it. Mistake? No defined risk!! At what point am I wrong on this trade? 30 ticks or so higher, there is another resistance level, which if taken, shows I'm wrong. However, I had no such exit plan. This is what happens when you dont control risk -

I'm trading well, and cutting out such speculative trades will transform my trading. Speculative trades without proper risk control? Worse things can happen besides a decent sized loss. Account blowups are made of this stuff, so I need to watch out. This is precisely why I added the trade quality categorization to my trade log. No more "C" type trades, which are speculative in nature.

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