March 11th Day Trading Recap: 4 Points – The Week Starts Slowly

Wow, what a painfully slow way to start the week.  As traders we shouldn’t have really been surprised bit it though.  There was no major news scheduled on the day, the pre-market was very weak, and the initial moments at the market open proved rather uneventful.  All of this means that a trader better be ready with some patience and discipline as it’s likely to be a slow ride early on.

Day Trading Chart for 03-11-13

My initial long was a little frustrating because I was probably too patient in waiting for a movement higher that never came.  I had hoped to take some profit of at least a few ticks when we failed at 1544.75 the final time but unfortunately I was unable to get filled and I had no real choice but to take a break-even on the trade.  We’re not usually fans of break-even trades here at Samurai Trading Academy but it was the right decision here as the subsequent price action showed.

Why are break-even trades sometimes not a good thing?  Because in working with traders in the past I’ve found they often hurt their long term results when they are too quick to move to break-even on a regular basis.  Usually a trade needs a bit of room to “breathe” so unless you’re very confident that your original setup is invalidated, a move to break-even is often a poor choice.

Novice traders are always extremely proud of their break-even trades.  Veterans know that there is nothing wrong with a small loss if the expectancy on the trade is good over a larger sample.

Remember what I was saying right from the start of this trading recap about needing patience and discipline?  Well, right after the long that didn’t work out I suddenly became impatient for a trade and made a very bad trading decision.  This short was NOT a valid trade according to the rules and should have been avoided entirely.

I’m not afraid to say I made a mistake – sometimes it happens no matter how much trading experience you have.  The various emotional tugs of fear, greed, boredom, excitement, and many more are even present.  I lost focus briefly due to how slow the market was and decided to do something very aggressive that I instantly regretted.

The key take-away is that I quickly realized my mistake and took action to remedy it and move on.

Many traders run into serious trouble when they make errors like this.  They know they shouldn’t have taken the trade but they don’t want to accept the loss right away because somehow this confirmation makes them feel even worse.  So instead they aim for a break-even trade only to see the position move further and further away from them.  Suddenly what was just a minor error becomes a huge problem.  We use tight stops (5 ticks) here at STA for every single trade so our risk is very limited, but I have seen some foolish traders with poor risk control where this sort of small mistake grows until it actually blows up an account.  It sounds crazy, but many people are more afraid to admit that small mistake than to just lose it all and start over.  Don’t be that type of trader.  If you make a mistake then take action to quickly correct it (loss or not) and then move on.  There are better trades out there.

Those better trades soon came as we had a couple of ideal longs that finally began to get the market moving.  The first trade was a 2 point target and based on the structure of the market and how slow things had been I had little interest in a more aggressive hold.  I left a point and a half on the table but the conservative exit was a choice I felt more confident in and that’s what counts.

Our final long was picture-perfect and I had hoped that would mean we would finally see some real action and a nice run.  While things started well they slowed rather quickly and with the 1550 area looking protected I again took my profits.  It had already been a long day thanks to that slow start so this seemed the perfect time to wrap things up.

Hope you all had a great trading day.  Hopefully you held your discipline a bit better than I did!

 

Reflections for the Warrior Trader

  1. What sort of things can a trader do in the middle of a slow trading day to quickly boost their patience and discipline?
  2. Should a stop-out be the point where you admit you’ve made a mistake or is waiting for this outcome just an excuse to avoid a difficult trading decision right away?

 

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About the Author

Cody HindFounder & Head Trader of Samurai Trading Academy. Cody has almost a decade of day trading experience in the Emini S&P 500 futures and Forex markets. He has also coached dozens of traders, helping them to achieve their financial goals.View all posts by Cody Hind →

  1. Darren BreattyDarren Breatty04-18-2013

    Hello! I just would like to give an enormous thumbs up for the outstanding information you’re providing here. I will be checking back often so please keep up the trade reviews!

    • Cody HindCody Hind04-18-2013

      An enormous thumbs up, huh? Sounds pretty good! Glad you’re enjoying the content and we’ll be sure to get more quality stuff out there in the near future for you.

  2. PerryPerry04-18-2013

    After studying a few of the posts on your web site I find I truly love your way of trading. Fantastic stuff! Will be contacting you to learn more about the method and training.

    • Cody HindCody Hind04-18-2013

      Sounds good, Perry. Just use the Contact page and we will get you all the details you will need on the training program. Looking forward to sharing our approach with you!

  3. ChristianChristian04-22-2013

    I really like these writeups, especially on the slower days when trading can be really difficult. Great trading my friend!

    • Cody HindCody Hind04-22-2013

      Thanks a lot, Christian. How a trader deals with those slow days is often what defines their success. It can be difficult when things are slow to keep your discipline and stick to your plan, but if you do you will find both short and long-term success. Best of luck with your trading!

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Join The Samurai Trading Academy Newsletter

The Samurai Trading Academy Newsletter is completely FREE and will keep you updated on new posts to our blog, while also giving you access to exclusive day trading training content for subscribers only. Join us and learn to conquer the markets!

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