I guess yesterday was a premonition of things to come. I took a really tough loss today trying to average in/ add to losers while playing for a reversal on FAS. Got cocky and thought I was going to beat it this time and I didn't. Like I've posted many times over the past months since I started, the problem with adding to losers is that it only takes one big day in a single direction and you'll get dropped on your head... reversals just don't come on days like today, only small pullbacks. That happened to me today when the reversal I was playing for did not come.
I'm not even for a second considering quitting the markets. But I have given my word to Mrs. Bluecollar that I will never trade that way again. And if one thing is true, I am a man who keeps his word to others. No more adding to losers. My pledge to her is that if I do it again, I WILL stop trading. I'm going to have to sharpen my skills and be prepared for taking stop losses and poorer win rates. But, I simply can't afford to do this again. It's tougher on my psyche than my account. This is not a killer loss financially in the big picture. But, it does sting my ego and my confidence, which is good for me in the long run, I think.
After all the carping about not adding to losers, doing the "trading bootcamp" last month, posting stories of how other traders blew out their accounts by trading this way, and all the times I've read Scott Farnham say how stupid it is, I feel like a fool for having to learn the hard way. Sometimes wisdom is hard to come by.
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8 for 22, a 36 % win rate. Loss of $3789 in 6 hours of live trading.
