I do not remember when I had a negative week last time. It was perhaps some time in early 2009. Now here it comes again. I am down more than 400 dollars last week.
Having looked at all the trades from the the last week, I found 2 issues.
- Not a single winner
- Bad judgement about the general direction
Not a single winner
I normally aim for a 1.5% -2% move, which gives me 300$-400$ in profits because my position size is worth about 20k on average. Only one move was needed to cover all the losses. But I caught none. These small losers were the direct results of whipsawing.
For example, I shorted CF(CF Industries Holdings) and CLF(Cliffs Natural Resources ) on last Friday. They never really moved in my direction that much. I could have had a small profit in my CF short(200 dollars). But it was not my plan. My thinking was “OK move 1% more, I would break even this week”. It was a wishful thinking and that position ended up flat.
Click on the image to have a better view
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Bad judgement about the general direction.
We had a nice rally last week. But 50% of my positions were on the short(wrong) side. Trading against the general trend is like an uphill battle, which is totally opposite of choosing the path of least resistance.
There is at least one shinning spot in my trading last week. That is my risk control. A loss of 400$ in a week is perhaps nothing because I only need one winner to cover that.
By the way, although there is 150k sitting in my account, I rarely use more than 50k at one time. But knowing that I have enough capital to cover the rainy days(a long losing streak) makes me sleep better.
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