Trading Review

My effort for the last 2 weeks has been put toward stabilizing my focus. By focus, I mean getting in the gear of thinking objectively about what I see in the market, and not letting any emotions get in the way of making high probability trades.

The main focus has been on recovering and strengthening my mental game. Therefore, my daily focus has been on indulging myself in these types of books and materials. I've also done alot of self reflections and self talks in relation to what I've learned. I've let profitability go for the moment since I believe you can be lucky with one or two winning trades, but you won't be able to keep it if your mental edge isn't there.

That being said, there are two major mistakes I made today.

1) Long Dal

Reasons for entering:

• market overall was strong; spy making new highs with momentum
  
• airlines were showing strengths: cal, amr, uaua, luv, etc all went to new highs with momentum.
• Dal was lagging at the moment and was in nice consolidation
  
• Resistances were: morning high at 5.72; then possibly 5.90 on 30min timeframe
• Stop was at .63
  
• I got in at 5.68 on it's first pullback after it took out yesterday's high at .66 and as its volume picked up

Reasons for selling:

• got nervous when it failed to get past morning high at .72, and put in some really scary wicks several times that went down to as low as .65.
• this got me to think that there was possibly strong seller at the morning highs that kept whacking at the stock.
  
• I quickly scaled out as I didn't want to take a loss.
  

Mistake:

• I had let the "fear of losing $$" get in the way of staying in a trade
  
• At least I should have left some on the table to let it run its course, but I got chicken and sold everything
• I had left a possible .20 on the table (actually went to 6, but my target was around .90)
• But that being said, anything looks good in hindsight, I'd never have expected it to run up straight so nicely. As Larry Levin said, "our mind plays tricks on us and says we shouldn't have missed out." So we should never feel guilty when we look back on trades that run without us.
• I should have watched it or sat an alert on it going past its highs. So, I could get in on it again and then set stop right below its highs. I simply abandoned the trade and never looked back. Only after an hour later had I went back and checked that it had indeed run past its highs, etc.
  

What I did right:

• I always believe that as a trader capital preservation is job #1. Even i left some $$ on the table, but there's always another trade/idea just around the corner.
  
• I didn't let the "fear of losing $$" prevent me from entering the trade. This is something that I've been working and focusing on, I'm glad I took the trade because the MARKET told me at the split second that it was the right thing to do.

2) Long USB

Reasons for entering:

• market volume came in once again as spy and xlf continued its morning uptrend after their brief noon-time consolidation
• USB and MS were leading the financials today, as each of them made new intra-day highs way before xlf and other major financials.
  
• I wanted to get into MS, but it had already began its run pre 1pm, so risk reward wasn't as good
• USB has just began its run, I thought it would make another run higher since it's been leading other financials
• I entered at 17.9
  

Reason for exiting:

• I chased it and the moment i entered I knew i was wrong because I was too "in the moment" for the big move that I didn't think too much about where my stop loss was.
• Just at this moment I was also distracted by an important phone call, and all in all my mind was going nuts as the market continued higher but USB failed to hold its .90 bid.
• I immediately went on capital preservation mood and quickly sold 1/3 at B/E
• I checked other financials, BAC, WFC, MS were continuing to go higher with relative strength, but USB continued its struggle below .90.
  
• I scaled out and took a small loss

What I did wrong:

• no matter what, I should never have chased a stock
• and more importantly, I shouldn't let the "ego of wanting to be in something quickly because I'm going to miss a move" get ahead of "risk and reward; is my stop going to be too far away?"

What I did right:

• sure enough getting out was the right decision as USB never again closed above 17.9 for the day.
• Since the rally was still going strong, I immediately jumped into WFC as it just reversed to upside after having found support at its noon high of 23.65. I scalped out as it went up because the market spy was approaching gap fill from 3 days prior at 92ish.