Execute Your Play Book

The past few days have been nothing other than a calamity of errors on my part, not because I’ve lost money, but because I’ve bumbled the opportunity to make a lot of it.  You will hear this next line recited by many traders, and frankly, it’s true.  There are periods of time where I lose money and pat myself on the back for doing an awesome job executing my trades and managing risk.  Then there are the times when you are making money, but are angry as hell at yourself for poorly managing risk and not executing your play book.

In football, the job of the offensive coordinator is to pick the right play from the coach’s play book at the right time.  The job of the quarterback is to execute that play.  There will be times when the right play is called and the quarterback does everything in his power to execute effectively, and still the play will not work for reasons out of their control.  This is life.  The point here is that the only thing you have control over is the play you call and how you execute it.

Looking back at your trading history his something we all need to do.  It is only helpful though if you learn from your mistakes, crying over them gets you nowhere.  So let’s go through a few.

I closed the $STEC short way to early and for no good reason but trying to protect profits.  At the end of the trade I came away with 1ATR profit, half of the 2ATR loss I use as a stop.  There was no great reason for my covering the stock last week.  $STEC is down 11% today.

I was long $AMZN and stopped out at 92.90 for no good reason on 10/21.  I tightened my stop into earnings and took 1/5 my normal loss.  A complete failure of executing the trade correctly, no need to say anything more, if you haven’t seen that chart you must have just crawled out from under a rock.

I stopped out prematurely on $PCX yesterday after tightening my stop around break even.  $PCX had broken the 50 day moving average, but still sat above important support levels.  Up 21% at one point today after I just about bottom ticked it yesterday.  There was once again no good reason to move my stop up either than what @ppearlman would call performance anxiety.

Update (3:45PM): Forgot to mention that I completely missed the fact that $PCX was reporting this morning, add that too the list.

Now on to the trades that I had all lined up and never made.

I’ve been all over the short trade in the solar stocks.  I still hold a short position in $LDK, but have been paralyzed to act on perfectly good setups in other names that I have both posted charts and talked about here.

$WFR is in complete free fall after giving a perfect entry which I noted on 10/23.  From 15 to 12.75, enough said.

I came in this morning ready to sell $X on any dollar strength.  What a perfect entry, oh man, $X is now trading down almost 8% and I have no position.

In a well executed trade this morning I am long TreeHouse Foods $THS.

There are times when every trader fails to execute properly, it can happen for many different reasons, the key is to step back and reset yourself.

Hockey tonight, I will crush someone, and score another hat trick, then come in tomorrow and crush the market.

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