knowing when to throw in the towel – trading trends eod report

A new traders worst case scenario happened today. Emotions were not under control and I found that the trades that I had stretched myself on were continuing to going against me. A feeling of being out of control crept in and so I closed everything. It may have been the best thing to do and in a few days time I’ll know either way.

It’s taken all day to formulate where it all went so wrong so quickly but this is the chain of events that brought me to closing 13 trades all in 1 moment.

Last week was a good week and I saw my account balance rise with plenty of open P/L in the positive. 
At the start of the UK session I was aware that a few trades had triggered during the overnight Asian session and that the trades which were in negative territory from last week were looking less likely to come back in my favour. Unluckily for me, the 2 positions that were still open were the ones in the red as I had not reached Profit Target 1.
Having seen a large gain in profits start to dwindle, it left me with that sense of deja vu that no doubt many a trader can relate to… So many times I have been doing well only to give it all back. I was determined not to let that happen again.

Unfortunately in my bravado of doing well last week I had started to increase my position sizes by another % point and that was starting to be the biggest source of worry. Its amazing that when it’s going well I think I am actually starting to ‘Get’ trading and then as soon as it reverses, I just feel stupid.

My mind was obviously Anchored on the previous level of P&L and I was keen to see it get back to those levels. I just kept on hearing myself repeat “if I had just left the position sizes the same, I could have ridden the draw down for a bit longer and scaled out on the retrace. Which is what could have happened… Cudda, wudda, shudda! 

Unfortunately the damage was getting close to my 2% a day rule (can’t lose more than 2% on each trade per day and after a draw down of 6%, I stop trading for the month.)
The draw down hit 2% and I closed everything – even potential winners and that was the thing which bugged me for the rest of the day. Because of the amount of trades on I just felt at that moment that I didn’t have the ability to trade my strategy and I didn’t want to live on the hope that they would come good. I kept saying “what happens if these just get to scratch and I lose everything?” By everything I only mean this months gains.

So my plan now is to trade even less. I obviously can’t manage 13 trades, so I shall limit myself to 6. I definitly cannot afford to increase my position size so it will have to stay at 2% a trade. I have a few weeks left in July to trade so I don’t want to blow my limit this early on.

There are plenty of pending orders on my hit list and so it will be interesting to see which come in first.