Reflections on a Challenging Day in Day Trading

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Hey everyone, Ross Cameron here! Today was not just your typical day of occasional trading losses; it was a maximum loss day, which is my first in nearly two months, marking a significant setback in my trading. While I’ve enjoyed a substantial positive streak, today’s events took a different turn, leading to a spiraling loss that became five times bigger than necessary. The day was fraught with emotional decisions, a stark loss of discipline, and a quick unravelling of my strategic composure.

The Emotional Spiral and Loss of Composure

The complexities began when I let my emotions overpower my trading discipline. This lack of composure led to aggressive decisions, which significantly magnified my losses. Instead of cutting the losses early, I found myself stubbornly increasing my risk, trying to recover from an unfavorable position, which only deepened the financial damage.

Breaking Down Today’s Trades

The series of events began with an early trade on a stock named BENF, which had shown a promising setup from the previous Friday. Despite not being a leading gainer in the morning’s scan, I decided to pursue it based on its previous performance, securing a small gain initially. However, the situation took a turn as the stock rejected off the VWAP (Volume Weighted Average Price), removing my early profit and setting a negative tone for the day.

Further trades included TCBP, which initially showed potential but quickly led to a minor loss. As the day opened, I re-engaged with BENF, which sharply turned against me, leading to substantial losses, especially after an attempt to catch a falling knife on a falsely anticipated halt in the price drop.

Adding to my challenges, two more stocks, MI and NUVO, were traded in quick succession, both of which resulted in significant losses. NUVO, in particular, was where I continued to trade aggressively despite already exceeding my max loss limit, ultimately closing the day deeply in the red with a loss of about $6500.

The Rules I Broke

Reflecting on the rules I violated today underscores the emotional turmoil I experienced:

  • I traded past my maximum loss threshold.
  • Instead of decreasing, I inadvertently increased my share size.
  • I neglected clear trading indicators that suggested I was heading in the wrong direction.

These missteps not only resulted in financial loss but also a break in my discipline streak, which had extended nicely over the past 27 days.

Contextualizing the Setback

Despite today’s heavy losses, it’s crucial to put things into perspective. Over the last 10, 20, and 30 days, my trading record still stands positively. The discipline maintained over these periods has allowed me to manage the inherent risks effectively, even though today was an exception.

Throughout my trading career, I’ve learned that drawdowns are spaced more broadly apart than during my early trading days. While a $6500 loss is significant, it is within the range of drawdowns I’ve experienced recently and, hence, manageable.

Regaining My Composure

To move past today’s setback, I engaged in a guided meditation focused on releasing anger and regaining mental clarity. This practice helped recenter my thoughts and prepared me for future trading sessions. It’s these small victories in maintaining some level of restraint, even amidst an emotional spiral, that keep catastrophic losses at bay and set the stage for recovery.

Looking Ahead

Moving forward, it’s important that I approach the coming days with heightened caution to avoid compounding today’s losses. There’s no benefit in risking further capital under the current mindset. My immediate goal is to rebuild the discipline streak and ensure more consistent trading decisions.

In conclusion, today was a stark reminder of the volatile nature of day trading and the critical importance of emotional control and discipline. Although today ended in a significant loss, the lessons learned are invaluable and will undoubtedly contribute to my growth as a trader. Tomorrow, I’ll return to trading with renewed focus, ready to apply today’s hard-learned lessons, firmly aiming not to repeat the same mistakes. Thank you for sharing in the reflections of my challenging day, and here’s to better trading days ahead!

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