Monday, January 23, 2006

Missing Trades

Oh Shit! No! That's not true! I really can't believe it!
Regret, frustration, a nearly impossible urge to jump on the train at full speed, followed by a loss.
I think, you all know this situation and the feelings and emotions you experience at these times.

10 minutes! You were making a coffee, taking your dog for a short walk, were engaged in a chatroom discussion or watching NakedNews.

You missed it! You missed the trade you waited the whole day for! Or worse, you saw it, you had the urge to press the trigger, but something, some little voice of caution held you back, let you miss THE TRADE. The trade which would have meant a real shortcut on the trader's road to immeasurable wealth and happiness.

Why do I write this today? Because Euro made a 100 tick run tonight. It opened at 1.2180 Sunday evening and while I slept in just 5 hours it made 100 ticks. Not gradual, oh no, within 10 minutes. If you had to pee during these crucial minutes, you missed it.
For me it was a contious decision not to take the trade at midnight my time. Not because I had no long signal, not because I could not see Euro 100 ticks higher this morning. No, I did not take the trade, because I did not want to take the risk. I want to follow the trade in front of the screen. I can not sleep with a trade open, I lost too much with trades open overnight, but especially: It is one of the situations, where I'm most likely to violate all my Stoploss rules. Euro is very thin during asian trading hours, so you need to use bigger stops to protect against flukes, spikes against your position, which will be reversed immediatly.

Did I feel regret this morning: You bet!

Did I feel the urge to join, to urge the Euro to make another 100 tick run to make good of my "loss", because that's actually how it felt. A missed trade feels like a loss and the answer your subcontious mind provides is jumping into the market to make good of this loss. Fortunatly I have been down this road already, have done it already in the past. And knowing, that Euro after 100 ticks needs to consolidate, before it can tacle the 1.2250FX (1.2300 futures price) round number resistance, I thought, I will not trade Euro this morning. I will not trade currencies at all. The reason: I did not trust my judgement in the Euro, as I still felt this imaginary loss, this missed trade I wanted to make back.

I traded the spanish IBEX35 instead (IBEX35 G6-MEFFRV | 10Euro/tick | 460 Euro margin/contract with IB). It's a thin market, usually moving in sync with the german DAX and I came to really like it in the last weeks and months. It made a nice Gap down and offered 3 nice and clear setups (of which I was able to take 2) for a profitable start of the week giving me the opportunity to make 80% of my daily goal in 1 hour.
Yes I had to say goodbye to the shortcut on my trading road, hoping that maybe the next time I will take it, but it's behind me now. I replaced it with the knowledge, that taking the longer road will let me reach my goals as well. You don't need the shortcuts, you need the consistency of the numerous small wins to build your account.