I identified another perfect trade this morning (in terms of range and volume, some of which I will discuss this weekend. This was the second 90+ point potential MNQZ23 trade I identified this week. One calculation error turned that first one into a loss which I recovered half of on the way back a couple of days ago.
I was about to place the order, and I calmly and confidently went to my direct order management system (DOMS) to place a bracket trade. Right as I pulled up the DOMS…the system CRASHED. TradeStation went down and reported some error function. I could not have prevented that, as I made sure that the platform was updated and running normally before I wrote the first post this money.
Had I executed both trades well, I could have jumped another two contracts in size and been well on the way to a bonanza this week. But I DIDN’T.
These things happen all the time in trading. Two things you need to do to prevent this from happening again.
Keep a trading journal that describes in full detail the errors that you make. Be VERY SPECIFIC in detail so that you learn from the mistake.
Keep your money management and risk parameters in place. For me that means DO NOT TRADE AGAIN unless all the conditions are met for my specific trade plan. That prevents your tendency to revenge trade or trade in response to any emotion you may face from the error you made or the circumstance that occurred.
Trading involves risk and risk requires discipline and mental sobriety (which includes lack of emotional involvement whenever possible. As is said in the laundry business, SHIRT HAPPENS. You cannot let a minor error metastasize into an account threatening event by breaking your trading rules inside of your trade plan.
I have other things to accomplish today, so I will pursue those items now. I did test my theory regarding Donchian channels as a result of what happened (since I had time to test the new study I had programmed into EasyLanguage). I will now begin to collect statistics on that basic theory, and I will let you know what I find out.
I hope this provides you with more good information other than just charts and support and resistance levels. Life shall proceed on, and I will learn and profit from the mistakes I made this week. Have a great weekend everyone!