10:33 The market soared and it gave me a great opportunity to improve my TZA swing trade. I bought 1500 shares long TNA at 10:14 am at a price of $29.59. I really nailed the entry, just a few pennies from the bottom of the big move down. Added to my 200 shares long, I had a total 1700 shares long at $29.75. I sold off 500 shares of risk for a $10.59 loss. Then holding, I dumped the other 1200 shares at 29.80 for a gain of $65.99. Far too early, but I will take my gains when I can, given how my original TZA position went against me this morning. That market gave me a good chance to exit and I took it quickly and willingly. had I held the 1200 shares, I had up to about 47 cents of total gain; approximately $565.
===========
3:48 I am still very much a prisoner to emotion. Today has been particularly difficult for me as my compulsion to play for mean reversion has resulted in a bad loss. I am essentially back to where I started a few months ago, having lost my gains and back to breakeven. Not at all where I hoped to be, given that I am at a point where I really need to have gains from trading to sustain our household. After all this time, and all that i know about chart reading, it is mental/emotional short-comings that are an anchor to my progression. I took a number of 'practice trades' where I would mark the chart in the direction of momentum. Every one of them was a winner. Instead of taking the trade, I waited until I found an area that looked as though a direction change was to occur, and on a big momentum day, the change doesn't come. And today, I added to a loser trade and got punished for it. I know better. I know that doing that very thing, as I've mentioned on this blog, is what strong market players feast upon. That the only protection from the sharks is to stop out. And I didn't. This is purely emotional. Either fear or greed; one or the other. It appears that I'll finish the day with a loss of $1,117.21.
Something must change for me to continue. I am not a fool. But I am imprisoned by a psychological wall. They are two different things. But they will be synonymous and yield the same disastrous results if a change isn't made and I keep on the way I am going.
---------
The approach I am taking to trading, fading strong moves with an eye toward reversion to the mean, is a very stressful way to do this. Always looking for a direction change means always being uneasy; in a state of flux. And not stopping out a trade is incredibly stressful, depleting one's emotional capital. It relegates one to always playing from behind. It does not allow the sense of success to offset the sense of disappointment from the losing trades that always happen. It is always trading with anxiety. It is incredibly wearing on the psyche, even when it is going well. Like parachuting with no backup chute or walking a tightrope with no net below, only the most hardened non-feeling individuals (sociopaths?) can resist the chipping away at one's emotional capital.
---------
Last year, while still practice trading, I had hit the wall as I have today and decided to throw caution to the wind, so to speak. As strange and anti-intellectual as it sounds this involved setting and adhering to stops and not exiting trades except as a stop-out or within 15 minutes of the end of the trading day. Weird, it seemed to me. And it resulted in a great relief; a sense of 'comfort' that I had not felt before. And I achieved some success while doing it. Gains were of a size I had not seen since attempting to learn trading. At that time, I still needed work in chart reading, so my stop outs were adding up more than I liked, but I was ahead while trading the way it is supposed to be done. In other words, on the right path to success. What happened to change it is something I don't know. It was a slow drift away. Like an alcoholic taking just one sip of beer after having found sobriety. One little drink after a year then becomes two drinks per week then a drink every other day, then...
The power of the mind to fall back into bad habits is legendary. We all know people who cannot help themselves even when the answers seem so obvious... and easy for us. I have to get back to that mental place where I was last year that sent me to try and briefly succeed in trading the right way. Otherwise, I will have to give up on my dream.
----------
