Bad Trading Day

Why must we as traders have to carry home the baggage of a losing day. No other business that I know of can give a person such mental highs and lows. Today was a tough day trading Soybean Meal, almost every commodity was down excluding beans, the dollar was stronger, crude oil was getting hammered, gold was down, equities posted their biggest single day loss for 2012. Yet Meal continues to ride the irrational exuberance rally wave. This is a rally that cannot be sold, just when it looks like the meal will reverse...Bam... a new high. So what did I do... Sell it, add to it, and watch it run away from me all day. This was a trading rule number one text book rule breaker, get out of losing trades within a predetermined loss parameter. I did not do this and suffered the consequences. Tomorrow I regroup and trade with discipline.

Why are you making that trade?

Over-trading


Over-trading can be just as dangerous as averaging losers and trading too big.
Do you find yourself making trades to compensate for the losing trade you just had?
Can you reflect on the feeling and emotion that is causing you to make that trade?
These are self awareness questions that every trader must ask themselves before taking on new position and entering new trades after just having a losing trade. Also, this can apply conversely to the trader who just had a winning trade. Erase emotion from your trading and do not trade beyond your comfort zone.