A legitimate loss…

Having waited patiently for a breakout, I eventually entered a long trade which didn’t work out. I was long 7 contracts and exited the trade with a 1.25 point loss per contract, 8.75 points in total. I was in the market for just over seven minutes.

fills-20080118.png 

While it is never much fun to take a loss, at least this one was entered according to a valid trading signal. I also managed to exit reasonably gracefully so that the loss was substantially smaller than my average win.  (If you do that consistently, it bodes well for your trading health.)

It has not been a particularly good week (although it might have been). I made a net gain of 16 points less commissions. Performance was marred by the poor discipline trade I took on Wednesday, which cost me over 18 points, more than halving my earnings for the week. Notice that keeping losses smaller than gains has enabled a 50% win rate to end up in the black.

As a day trader, I strive for consistent profits. I really don’t like those trading systems which, while profitable in the long term, require you to trade sometimes for months on end with no return. My aim is to take a monthly "income" out of my account. So, at the end of the day, I’m not going to quibble unduly about a positive week!

Well, it’s a trading holiday in the US on Monday, so I look forward to continuing this diary next Tuesday. 

Comments are closed.