26 Sep: Mistakes & Reflections

I should not have adjusted the target for an Investing trade again. It gapped down the day after it went out and I could not capture that move.

For the 2nd time, I made the mistake of adjusting of an investing trade prematurely. The last time, it resulted in a 13% loss instead of a 60% profit. Now, it resulted in a 20% profit instead of a 60% profit.

Not only that, I've experiencing a bit of frustrations recently. Everytime I sell an option, it makes a nice move in my direction immediately after. Sometimes I hold it for a while more, and it makes a move against me.

Yesterday, I traded the Broader Market, but I'm afraid I have made a mistake. Although the broader market closed the first hour below the 22pma, by 11pm the Nasdaq is trading consistently above the 22pma. Sure, the rules say, "at 1st hour close", but nevertheless, the mixed signals make my trades a bit aggressive, and I quite regret entering the trades, esp with a combined potential loss of $600. Furthermore, I used to trade BM with SR, but this is a pure BM trade and I really needed to stack all the probabilities on my side that the BM is going to dip.

But there's a positive note to all these. In spite the mistakes, I have still be capturing good profits overall. But I know that I need to eliminate these mistakes. Anyway, I'm going to reinforce some rules for myself based on these situation.

1) The target of an Investing trade is always a 10% move.

2) Do not adjust the Target on an Investing trade before the last day. Do not adjust the stop loss before it tests the 22dma.

3) Exit positions on the market open on the 4th day open. Do not waste time refreshing the options chains continuously.

4) The entry requirements may be met on the 1st hour close. But if that changes when I am placing the trade, do not enter the trade, or conservatively.

5) Prepare for market open by examining the potential trades before 1030pm to give myself more time to consider trades. Have them keyed into my excel sheet and trade calculator so that I only need to make adjustments.


Previous Mistakes and rules:

1) Stop Loss using dma/pma +/- 1 must be tight enough by itself. Only use 1st hour high/low to further tighten. Do not enter trades it the dma/pma stop loss is >28%.

2) Always enter a trade only when you are 100% sure that has met the rules requirement. If there are any oddities that make you feel suspicious, make sure that you talk yourself through it to determine entry or not.