Full disclaimer, this post comes directly from my own private trading diary and I have not moderated it in any way. I have posted it here to try and provide some level of accountability towards my new strategies.
Ok, so the day began poorly suffering a cumulative £30 of losses on oil and gold overnight. This was the beginning of the problem as it led to anxiety about recovering losses.
However, the main losses of the day occurred during the NFP session. First of all, I was entirely correct to short the SPX500 after the bad payrolls data. This was a perfect move. However, the lack of patience meant that I panicked when the market initially moved upwards on the back of algorithmic buying. This panic occurred because the size of the position I was using was too great; meaning that the losses were racking up relatively quickly. Thus, a 3 pip move in the SPX led me to panic and cause me to stop-out. The market subsequently fell 10 points – meaning that a £10 loss could have been a £30 gain in two minutes.
Second of all, the gold trade was another mistake. I should have been fully prepared for NFP by closing all trades which may suddenly have been activated as a result of the sudden movements which were likely to occur. However, once again we learnt that the main issue was one of patience. My stop loss of $7 was simply not great enough to provide me the leeway necessary to move back down and correct – as it did. The market continues to be moving downwards.
In reality, what I should have done with the gold trade was to close it immediately – it was opened by accident and the market had already plummeted 1.25% - it was unlikely for gold to move any further on the back of jobs data.
On the whole, I have decided to stop trading myself for the day due to the losses which have been suffered and the likely effects this would have on my psyche. I fully intend to return to trading fully on Monday.
The plan for the weekend is to do some technical analysis of the EURUSD – which I expect to continue to weaken up until the GDP numbers, GBPUSD which I plan to strengthen mildly until we reach the final vote, and the oil markets which I expect will get stronger on the back of growing tensions in the Iranian area. I was particularly surprised by the oil losses this morning as it appeared that the fundamentals – the seizing of the tanker in Gibraltar – were on my side. However, once again we saw a stop-loss which was too tight, and if we had stayed in the market then we would have achieved better results.
Finally, I think the main reason why today went badly was due to the late start – which meant I was behind on my schedule and did not have time to fully prepare for the NFP report.
As I finish typing, gold has fallen back below my entry – again demonstrating the losses sustained were unnecessary.
As predicted, the SPX500 is now down 1% - I expect this trend to continue into the week ahead.
Enjoy the weekend.
:)
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