Something I'll do sometimes to get myself through a tough day in the market is to write down some factors that affected the bad day I had. You don't want to necessarily dwell on the bad day, but use it as a way to improve yourself as a trader as to not make the same mistakes over and over. Going over your performance on a daily and weekly basis can bring your issues to light much quicker. You think you know what is working or not working by just thinking back, but when you write it down there is a part of you that never wants to write it down again (mistakes). You'll understand what is really taking place in your trading and you'll be able to come up with solutions so you can move past the mistakes and maximize your success.

Here's an example of what I will do:

 

How to respond to a loss:

1. Identify the positives

2. Identify your leaks

3. Rank your strategy 1-10

4. Rank the level of your execution   1-10

5. Rank your effort  1-10

6. Urgency  1-10

 

Following a red day:

 

2/1/18   -$691

 

1. I cut the overnight loss for much bigger than was expected because of a huge gap down. The positive was that I did not wait and try to see if it would perk up or retest green, I just stuck to my plan of when it goes red I would cut the loss. I didn’t allow the fact that the loss was much bigger than I wanted it to be affect my plan. Starting the day down that much was much different than any morning in the last month or so, so it affected me mentally. There is always the mindset of trying to make back losses the instant after you take them. This causes you to force trades that you wouldn’t necessarily take. I did not force any trades. I really wanted to but I decided against it every time. Which was good because they weren’t great setups and because they all would have made my day much worse.

2. I probably shouldn’t have been swinging the position at all. I had already botched it up so badly  twice the day before and already racked up more than I am willing to lose on a single position. The risk of another loss (just a normal loss, not the extra because the gap down) was just not worth the potential upside if it worked out even if I came out a little ahead. I was also in a little too big going into the close and down on my position. I should never be in full size like that risking an overnight especially when I am right at my risk. I need to be thinking about “what if it doesn’t gap up” more than having good size to protect myself in the future. I also missed out on a play I probably would have taken if it were a green start to the day because of fear, and it would have wiped out all my losses from the day as well. I need to be able to differentiate the good trades from the bad regardless of my pnl that day.

3. 5- I think I could have done a better job with the position that put me in this position today. Already went over why I shouldn’t have been swinging it. But I didn’t make the situation much worse where I am demoralized from it like I have heard some horror stories.

4. 10- I executed my strategy, regardless if it was not the best one, as best as I had planned for. I cut the loss when I said I would and I didn’t overtrade after the damage was done. It was actually the least I have traded in a day all week and probably month.

5. 8- with the strategy I had, I didn’t let it get me down too much. I didn’t let it affect my sizing on the next trades. My read on the market today was just off and I recognized it.

6. 5- when I made the trade yesterday, I was aware of how badly I had already screwed it up, yet kept trying. I need to use that awareness and allow the stock to “beat me” if you will. I was no longer trading, I was trying to prove to myself that the pattern would work and it didn’t matter how many times I had failed at it already.