A Profitable Week
I will start off by saying that I had a fairly profitable week overall in terms of day trading.
It was a shortened trading week because of the 4th July holiday and the half day on Monday, but there were still plenty of volatile price swings in the rest of the week to make up for this.
Here are the trades that I took:
- US Oil (Monday): +32 points
- Gold (Tuesday): +0.75 points
- Nasdaq (Wednesday): -17.2 points
- Nasdaq (Wednesday): -12 points
- US Oil (Thursday): +29.5 points
- US Oil (Friday): -17 points
- US Oil (Friday): +17.9 points
- US Oil (Friday): +28 points
As you can see, it was not a bad week, but the two trades that really frustrated me were the two Nasdaq trades because these could easily have been avoided.
Breaking My Rules
I’ve been trading for over 20 years now and so you would think that I would be ultra disciplined by now, but the reality is that I still place impulsive trades from time to time that are not part of my overall strategy.
These two Nasdaq trades were placed in the last two hours of trading, and I think the main reason that I took them was because I hadn’t found a decent set-up that was worth trading in the previous 11 hours from 8 AM to 7 PM UK time.
Normally I would just switch off my computer and come back the next day when this happens, but on this occasion I took two trades on the Nasdaq because I had convinced myself that it was highly likely to drop back down to the day’s lows, which it ultimately didn’t.
I think the quiet holiday period may also have been a factor because the previous day on 4 July, I only entered one trade on gold during the London session that came back and stopped me out close to break-even. So I was keen to get back into the markets and start making some money again, which is always potentially dangerous.
Trade Analysis
You can see my executions in the chart below (the red arrows show where I took my short positions and the blue arrows indicate where I was stopped out):
I don’t necessarily think there was anything wrong with the trades themselves. There were logical reasons why I entered where I did and my thesis could easily have played out on another day.
The problem was that although my potential profit would have been much more than my stop loss, in hindsight these were 50/50 trades and I generally like to enter trades where the odds of success are much more in my favour.
In addition, I shouldn’t really have been entering these trades at all because they were not based on my normal trading strategy and based on previous trades during the last few hours of trading, I know I don’t generally trade well during these hours. My win ratio is definitely no more than around 40-50% during this time.
Key Takeaways
The reason why I wanted to write this blog post was to encourage anyone else reading this to stick to their rules and not deviate from their trading strategy with stupid impulsive trades like this.
It will also help me to become more disciplined next time by writing down my thoughts and documenting them on this site.
Although I only traded these with smaller position sizes and I did at least use tight stop losses, it would have been a more profitable week if I hadn’t even considered taking them in the first place, and so this is a key lesson that I need to learn going forward.
Stick to your rules and your proven trading strategy, and don’t place impulsive trades when you haven’t found any set-ups in your usual trading windows and are looking to get back into the markets.
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