Today I made my first loss. It was $315 (~10%). Sure, it really sucked, but I'm forcing myself to admit it and also look inward in hopes i learn from it. Here I posted some good lessons learned.

The Errors

Error #1) Forcing a Trade and not Scoring it -- when I entered this trade I said I was basing it on it's continued b/o of intraday highs and 2 prior bullish 3-line strikes. While this may be true, the chart didn't validate the 3-line strikes and candlestick patterns lose their "strength" after 5-10 additional sticks.  

 

Error #2) Looking for a "reason" to trade. Not trading like I was retired.  

 

Error #3) Overtrading - 3rd trade of the day. Not necessary. 

 

Error #4) Breaking "Rule #1" - albeit for a reason I didn't consider before. Because I'm under PDT limit, I was much more "attached to this trade" and wanted it to succeed.  

 

Error #5) Not getting out when I COULD have made a profit on the day. 

 

Error #6) Major Sunk Costs Bias (See Errors 4,5). 

 

Error #7) Realizing only too late I was trying to hit a "homerun" and not a single.

 

Error #8) Too big a position size up front meant I didn't have enough room to add later when the bottom of the bounce did happen. 

 

The Costs

Cost #1) The obvious - $310 loss on this trade and around -$270 on the day. 

Cost #2) A ticker I had researched much more than this was doing quite well during this, and I missed it. 

 

The Lessons

Lesson #1 ) Admit your mistakes. This sucks. I gotta walk it off and not be so hasty next time. That's why now I have a log to remind me how I messed up. 

 

Lesson #2) Steven Dux "Close your eyes and press the button" trick really works. When you can't stand to see your loss, just close yours eyes and press the button. 

 

Lesson #3) Wait for the good trades. Pretend every trade is your "3rd trade of the week" for people under PDT limits. 

 

Lesson #4) I actually liked my stated process - making a thesis, then executing a trade, being flexible, and exiting when the thesis is no longer valid. In fact, I have a history of jumping out TOO quickly from a trade. But this was the opposite, this was too much sunk cost and confirmation bias, so I wasn't actually flexible, and I forgot to use the SSS Scoring.  This was probably a 50 at best.

Lesson $5) Small positions up front give more flexibility to add to your position (in certain scenarios). For example, I correctly saw stop losses getting taken out and there was a bounce; I was just way too early. But my large position took away my flexibility (Thanks to Pennystocking Framework Part 2, Disc 6 for a great example from Tim on this). 

Thanks so much to Tim for everything I'm learning already. I'm here to stay.