One bad trading day…

can possibly destroy the work of the whole week or even month. That is one of the extraordinary challenges that makes being a day trader a pretty hard job sometimes.When you have even more than one of those bad days in one week,there can be an immense pressure to make the losses back quickly. That is when you have to remind yourself to analyse exactly what lead to your bad trades and why you were not able to trade the way you wanted to.

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In my case i had two terrible trading days last week,that cost me almost all of my gains of this year. Fortunately after the second day i realized that it was a simple reason that made me lose so much in those days. I started both days with the feeling that the market would perhaps pull back after an initial upmove. So i made the decision to buy strength after the open and scalp those moves,because i did not believe that the market would have a trend day up.  So i took a big position with the intention of exiting after a few cents and got stopped out of that almost immediately. Because of the early loss i began searching my scanners for charts that looked promising and entered the first trade that i found. Of course i got stopped out again.

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All of that could have been prevented by following a rule that i usually follow: if you get stopped out in a strong stock after the open don’t take a second trade directly after that,because your judgement is still influenced by the emotions that followed the loss. My best trading days have been the days were i took just one trade in the morning and one trade in the afternoon. My worst days were always following the same pattern:quick loss,revenge trade and second loss and many  terrible smaller trades for the rest of the day with bad entry points (willing to take any trade to make the losses back).

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My best weeks were always those with about ten trades taken. That way i only took trades in stocks that meet my entry criteria exactly. Otherwise it can happen that i am not perfectly concentrated or react to something i hear or read,pull the chart up and make myself believe that is i have to get in. Most of the time i am able to stop myself from pushing the “buy” button,but sometimes after an unexpected loss or two it can be pretty hard to do.

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To be a really good trader you have to follow all of your rules all of the time. That is often easier said than done,but i am still trying to improve,someday i will get there. Hopefully that will be sooner than later.

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About Schwarzdaytrades

I am a full time day trader. I like to share my opinion about stocks and the psychology of trading.
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