The Life of a Trade

I liked DT233's Why Trading Will Kill You post the other day so much I thought I would offer another selection along those lines.

Maybe this is just because I finally had a trade that lasted long enough to actually tell a story about it, 45 minutes and 24 seconds. That may be a record for me.

Why so long in the trade?

I am no longer moving to break even at a certain point, instead I am trailing the stop at +8 from the hard stop of -13. I have found, albeit with a statistically insignificant number of trades, that I am staying in the trades longer.

I have moved my target up to 55 ticks as well, so this now means that I can have a -13, a +55, or any number in between -13 and +33 as my final result.

Now the real story on this trade was all those yellow bars after my blue bar entry. Ten of them, yuck. Did I want to check out with one of the many passes through my entry point?

Yes.

Would that have been an ok thing to do after 20 plus minutes in a trade that's going nowhere?

Probably.

Why didn't I?

I talked to myself.

I talked through the trade, yes my short ema was flat and getting breached, however my trailing stop had moved down 2 ticks to -11 so risk had been reduced a little.

That stop was still sitting above the middle ema, so I asked myself why do you have that middle ema on your chart?

Well it's supposed to tell me where trend is at on a longer time frame basis.

Right, so that trend is still what?

Short.

Right, so why not let it ride and see if momentum comes back your way?

Why not, I'll tell you why not a -$115.50 dollar result is why not.

Why not bail out at +-1 or 2 and wait for the next signal?

Hmmm.

Well, the move is slow...

Slow, it's non existent! (I'm now interrupting myself in this conversation)

Ok it's non existent but you had a valid signal, you have set your risk management parameters for a reason, why not let those parameters play out?

Fine.

But if this doesn't work I'm holding you responsible.

Fine.

Ok I'm done talking to myself now.

As you can see it finally went. Now the next emotion racking event was the MFE, 55 you say? Not quite, 52. LOL

Trade stats were, short entry 10:32:01 MST at $77.08, MAE -0.08, MFE +0.52, exit 11:17:26 MST at $76.77.

Yes 3 ticks away from target and it turned back to the trailing stop. A +31 result. Still very good.

So if there is a moral to the story it is this, we all have emotional responses in this business, no not just DT233, we all second guess, micromanage, and if it works in our favour we are genius, and if it doesn't, well you know.

Message to us all.

Let the probabilities work.

If you have a statistical data base don't corrupt it with your emotional in flight responses.

Trade like Captain Sullenberger; we're going into the Hudson, brace for impact, we've arrived, I hope you all enjoyed your flight.