Saturday, June 28, 2008

Missing an opportunity

Missing an opportunity for me comes in two different flavors:

One is the missed trade while I was not at the computer for some time and just couldn't take the trade or did not leave a trade open, because I don't like to be in the market when I'm away.

It's a missed opportunity according to the rules.

It might be that I'm angry for a short time, that I think, shit, what shall I do now, that this move has happened and we will most likely see only choppy consolidation for the next few hours. But I missed the trade according to the rules and that is ok, because I have a reason for that rule.

The missed trade which makes a lot more problems and which might actually cause me damage is the missed trade I did not take, even when my inner voice said "Go for it, everything is aligned, you have a signal, take it NOW"

Still for some unspecified reasons, which might be fear, feeling unwell or some other unclear reasons, I override the signal and my inner voice and the market jumps away.

It's these missed opportunities, which cause me problems, because I did not follow a signal, which was there to be taken.

A similar situation arises, when I enter the trade, but then -out of fear to have taken a wrong signal- trail it so narrowly, that the trailing stop will for sure get hit on the slightest wiggle, even if the trade is a good one and the market seconds later does what it was supposed todo.

Most of the times I recognize the symptoms now and stop trading for a while if this problem occurs, because then I know I'm no longer fit to trade. I just don't have the energy and stomach to give the trade the room it needs to develop.
If I don't recognize the symptoms, then the day usually ends deep deep red. Because then unconsciously I will try to make back what I missed with the follow-up trades. And this is a setup which usually ends in disaster.

2 comments:

Firebird said...

So true Globetrader.

I trade oil and surely it hurts to log in only to see that you just missed a full 2-3 dollar move and that you are just going to get some choppy consolidation for the next few hours, but missing a signal due to hesitation only to see the market go through the roof or even worse yet, getting out of a trade at breakeven +-1 out of fear and then freeze like a deer in the headlights as you see the market shoot only to count the money you would have made had you just held on to your trade for another second or two... after that I have to stop trading for the session (not doing so blows a whole week in a matter of minutes).

Best trading,

Jorge

Ronald Rutherford said...

Learned the hard way, what a reverse stock split was. Luckily my broker understood that the system let me short sell some the stock against the rules and rescinded my trade (at least for myself). Otherwise I was looking at a $20,000 loss.

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