A tough day which did not have to happen. I'm going to work hard in this summary to find the good in a big losing day of paper-trading. I'll start with this. Except for one trade, I was actually up $1.60 per share. As happens from time to time, I found myself playing for a reversal on a big directional move... this time on GS. Volume level and price distance from the mean were signaling an entry... but, it was a "false positive" and the trade sped right away from me. I did the worst of all things... instead of selling (or reversing), I averaged onto the losing position. This is something which can REALLY sting you, and this was one of those times. It's bad enough to hold a loser like this for so long but the pain is compounded exponentially when one adds on to the loser as it moves away. I just continuously shake my head at my inability to correct this habit. All I can hope is that I will eventually learn to manage it. Truly, I don't think it is a fear or greed thing... I think it is a false sense of confidence in my method. It is correct often enough that I expect it to work all the time! Averaging in on a trade which is down can and often does, reward you with a gain, provided the reversal eventually comes, and comes in time! But, depending on the entry, you may not recover. I didn't... Enough said about that.As I mentioned before, that one lousy trade made all the difference. I was up $1.60 without it, I had a 63% winning trade percentage without it. And, after the big loss, I was 7 for 12 with gains of $1.21 vs losses of only 35 cents per share.
So, there it is. The good and bad. It wasn't enough to leave me negative for the month.
I'll just continue to practice until I can get my head right... I have a reasonably good feeling about my trading method, I just need to work on the mental discipline.
22 for 36, a 61% win rate. Loss of -$4.37 per share.
