I've been trading on and off for the last 9 years with mixed results. Initially, I started position trading stocks and ETFs using a 200-day simple moving average with so-so results. I then graduated to swing trading options of index ETFs using a 21-day exponential moving average with better results. In 2011, I moved to futures, in particular the YM and the TF. I wanted to be able to trade intraday without the pattern day-trader requirements.
I started off well -- albeit, way over-leveraged -- trading 5 contracts with a starting balance of $10k, using probably what I would call the closest to price action (even though I did not know what it was called back then). In a few weeks, I quickly was up $4k. I thought, "Heck, this is just way too easy."
Greed and overconfidence -- no, cockiness -- quickly clouded my trading decisions. I began taking trades that I wouldn't have just a week earlier. I ignored my profit targets. I started moving my stops. Eventually, I traded without placing any stops. Although I had a few days in the green -- pure luck, I'm sure -- I was beginning to quickly lose the gains I had made.
Then came an FOMC announcement day. Instead of sitting on the sidelines until the announcement was over and the market settled a bit, my overconfident mind opened a position minutes before the announcement. A big swing up into the green into the announcement, well beyond my profit target. But, I did not close my position. Greed took control. The market reversed fast and hard to the downside. I sat and watched not only my profits disappear, but 50% of my total account balance evaporated in less than 5 minutes. I finally closed my position in absolutely horror as to what had just happened.
I revenge traded for awhile with what was left, trying desperately to re-coup the losses. After another meltdown, I was afraid to pull the trigger. Eventually, I had to tell my wife the bad news. I had lost it all...
I re-funded my account, and went on a quest for the Holy Grail, but instead of my trading performance looking like something from the movie "Excalibur", it ended up looking more like Monty Python's version.
Fast forward to today. I've been a very quiet member of Big Mike's for about 6 months, reading a lot of trading journal and psychology threads. A few of them stood out for me, and I would like to acknowledge them:
Big Mike - for giving me the impetus to start this trading journal.