Daily Review

a major mistake i made today was shorting MS.

Why was I wrong:

• I focused too much attention on 1-min timeframe for entry and ignored a bullish price structure on a longer timeframe (5-min)
• The pattern on 5-min was not pointing to a short.
  
• Mentally I was hungry for action, I did well scalping this morning and thought I would make a killing for any entry - disrespected the market
• MS was a strong, upward trending stock the whole day, it was relatively strong to the overall market and financial sector - bad idea to short a strong stock; i played a wrong stock.
  
• I TRIPLED my short position when the initial short went against me. Again, I focused too much attention on 1 min timeframe, thinking it'd roll over soon. But it just kept going, because on a longer timeframe it was strong on every level - strong on 5min, strong on 20min, strong on daily.
  
• The idea to scalp a short was a correct one as xlf and spy made a strong dip and MS was the one that hasn't fallen off - but I should have gotten out immediately if it wasn't working and shouldn't have added to my wrong position.
  

What I did right:

• I noticed my wrong-doing immediately and scaled out immediately - stock went way higher afterwards.
  
• I immediately stood back, isolate myself from my emotion, took a deep breath and immediately reminded myself to not revenge trade.
• I knew the immediate feeling was to get back all the loss quickly by trading aggressively, but I know that most of the time, that's a receipt for disaster.
• So i held myself back to prevent over-trading. I was able to make back 1/3 of the loss rest of day.
  

A repeated pattern?

• one of the reasons of writing a trading journal is to capture repeated mistakes, so I can isolate them into a common theme and prevent future occurrences.
  
• The exact mistake was committed with a BAC trade I did 3 weeks ago. Although the setup wasn't similar, my focus at the moment was the same.
• 1-min timeframe was not aligned with 5-min timeframe. When 5-min timeframe was basing or wasn't a short, I committed my capital go to short on 1-min timeframe.
  
• I also tend to add to failed trades, therefore making the mistake 2 or 3 times bigger.
• I also tend to wait longer in this type of failed trade. I never had trouble taking quick losses when going long. But I tend to add to shorts when they go against me. hmm.
• To correct this pattern, I must start from the root, which is by focusing on 5-min timeframe and only enter when shorter 1-min timeframe confirms the thesis of the longer 5-min timeframe. This alone will prevent me from over-analyzing a tree and missing the whole forest.