BIG Mistake!


This past Thursday, I had my worst trading day in about a year and half. Understand that I usually don’t judge my good days versus bad days by looking at my P&L. You can read about my philosophy on that here. But Thursday my P&L was ugly too. Not only did I screw up in multiple ways, I lost money too.

What happened?

First I broke my #1 Rule. Now this rule is technically #10 in our Day Trading Course, but I believe your set of Day Trading Rules needs to be dynamic. It should constantly change, evolve and get re-prioritized based on the current market and your current ability to react and adapt to the market.

Rule #10 – TRADE OR DO SOMETHING ELSE

What this rule is really all about is giving day trading the respect it deserves. Day Trading is Freakin’ hard so if you show up late for work (like I did) with little to zero prep (like I did) you should fully expect to lose $ (like I did).

I was completely out of my morning routine on Thursday. I knew it but chose to ignore my rule. Monday through Wednesday were good days so subconsciously I got a little over confident. I strolled up to my desk around 9am, “borrowed” someone else’s watch list and threw money at some of those stocks when the market opened. Then I got hammered by the stupidest mistake ever.

What was this stupid mistake? I accidentally bought something twice and didn’t even realize it. It wasn’t the best set-up to begin with so I was hyper defensive with the shares I thought I owned. I only lost a little on when the stock went up about $.04 and then slammed back down at me. I at least followed my DEFENSE FIRST rule and got out of those shares. I moved on and was quickly in another trade… However, I still had another full set of shares from my first trade. A couple of minutes later I realized I had them (when I glanced at my position window after entering another trade). By that time those shares we down big. I immediately sold and for a fairly large loss.

What a stupid mistake, right? I’ve accidentally bought shares more than once several times before being a little over zealous with my buy button and/or hot keys. But not realizing I did it – this was a first for me. Total fluke.

So, what did I do?

How did I handle that loss?

  • Did I blame the market?

  • Did I blame someone else?

  • Did I blame the other chat room for dumping shares (for pennies) they bought in the premarket anticipating what their leader may or may not do at the open causing the stock to tank?

  • Did I go into a death spiral?

  • Did I start throwing darts at every trade that might work desperately trying to get my $$$ back?

  • Did I take Friday off?

  • Did I think I suck and maybe I shouldn’t be a Day Trader?

  • Did I just blow off the loss and stay over confident and not worry about it happening again the next day?

  • Did I wake up the next day and do the same thing over again?

  • Did I do nothing and just HOPE that Friday would be different?

NO x 10. Of course not!

Unfortunately, this is how I see other traders handle losses/struggles/frustrations all the time.

What did I do? More importantly what do I think YOU SHOULD DO next time? There will be a next time for both of us so we need to figure this out.

I took a deep breath. I refocused. I asked myself what the hell just happened and how/why did I allow that to happen? I spent A LOT of time analyzing exactly where and when I went wrong. I wrote it all down. I talked to my wife about every aspect of it over dinner. Her eyes glazed over a bit but she gave me supportive advice and encouragement.

The next day, Friday, I got back into my daily routine. Like a drill sergeant. I even ran an extra mile to clear my head and wake my ass up. I got back to my routine step by step by step…

Basically, I got back to normal.

And guess what happened? I had a great day. I followed all my rules. My P&L bounced right back. Btw, here’s just one of the trades that helped:

So, what’s the lesson here? Why am I writing this? Three reasons:

First, to point out that no matter how long you do this, no matter how good you get, you are a split second away from making a stupid decision and having a horrible trading day. You are ALWAYS a split second away from saying $WTF, entering a death spiral and possibly blowing up your trading account. Every single day with every single trade you are in a constant battle with yourself to pay attention and follow all your rules. I am my own worst enemy when it comes to Day Trading. You are yours. As humans, we can self-sabotage ourselves in a blink of an eye. Just like the guy up there on that branch.

Second, writing this is one last dose of therapy FOR ME. I find writing things down (or typing them into my Mac) is very therapeutic. It helps me to work through issues, find solutions and put them in place. I encourage everyone to do the same. Basically, putting pen to paper helps engrain things in your brain.

Third, to maybe, just maybe, help at least one other person see how they too can get over a really crappy trading day. And get over it quickly. Losses are a BIG part of trading. You MUST learn how to deal with them. You must learn how to lose at times. You must learn to deal with days like I had on Thursday. Years ago, I had no idea how to handle a day like Thursday. It would have totally blown my confidence and stayed in my head for far too long. It would have impacted my trading for days if not weeks.

The next time you have a bad day and things go wrong, don’t blame someone else. Don’t blame the market. IT’S 110% YOUR FAULT. Have some personal responsibility. OWN IT. Own it by understanding exactly what when wrong in every single aspect. Then as @GreatStockPix would say, let it sting for a while.

But then GET OVER IT. Suck it up snowflake and put a plan in place so it doesn’t happen again. Work harder. Work smarter. Get back to what you know you can do and what you know works. Focus. Get back to your A+ Set-Ups and following every single one of your rules with every single trade.

Final thought: There are countless things a trader needs to figure out to become consistently profitable over the long haul. I strongly believe that handling a day like Thursday by quickly rebounding along with quickly adapting to different markets are two of the biggest puzzle pieces. Lock down these two pieces and you'll be well on your way...

Thanks for reading!

Questions? Comments? Reach out and/or leave a comment below!