Trading based on panic journal

[lonewolf]

I designed my trading system to be guided by fear & let panic take its course into pushing the panic button to buy or sell. Instead of trying to eliminate emotions (energy in motion) in my trading I did the opposite & include emotion in my trading so mind & emotion are in harmony.

To do this I view my trading not as speculative but as hedging. My system is often wrong but my back testing of my system puts the odds strongly to the system having an edge. Of course this could just be a fluke so I put a small amount on the table.
Even if I lose I will still have a positive cash flow for the year. By risking a small amount that can be compounded over the long run into a very large amount I view trading as a hedge to my financial independence. Putting to much on the table without a system that gives an edge would threaten my financial independence. By setting up my system as a hedge to protect that which I value ( financial independence) panic will guide me into following it.

I felt fear hours before the trades were placed then shear panic as they were placed. Then relieve after trades went through & after I checked for any mistakes.


Advanced Micro Devices AMD bought 1350 shares 2.85
Ciena 225 shares 12.75
gap gps 80 shares 36.07
Q logic 290 shares 9.89
Akami 78 shares 37.73
Spy put 90 dec 2014 (for hedge)

Market value $15798 @ end of day, cash in account 114

[lonewolf]

Finished a good trade today by selling shares of Q logic @ 9.71 for a loss ?????????????????????

Some might be wondering why it was a good trade even though money was lost. The reason it was a good trade was because it was not a bad trade.

A bad trade is when you have no method & or not using proper money management & you make money.

A good trade is when you make or lose money but you follow your system that has an edge.

(do to time constraints I am not sure if I will continue this thread)

[lonewolf]

closed out AMD @ 2.11 for loss
closed out gps @ 33.72 for loss

Both good trades even though I lost money I followed my plan.
Because I never put more then I can afford to lose on the table I still will have the courage to follow my plan. Even if I lose all the money in my account I will still have a positive cash flow for the year.

[Argonaut]

Closing out positions for significant losses are not good trades. Never lose money. Always make money. Avoid junk stocks.

[lonewolf]

Hi, Argonaut

Thanks for stopping by, You make an excellent point. I do value sacred money but not every seed grows when planted. A dust storm blew some of my seed away. A drought is to be expected now & then. I will look to the sky for better planting weather.

[Snuff_the_Rooster]

Kind of tough to never lose money but we try don't we? haha. Up @4:30AM trading futures because that's what it takes sometimes.

If U followed plan then win or lose you did the right thing. Maybe the plan sucks but execution was flawless.

I agree with Argo - just don't ever play junk stocks. I never missed a 10 bagger that anyone I know got - not for them trying, it just never happened haha.

[HaroldCrump]

I agree you are speculating with junk stocks.
Getting out of losing trades is a good move, but it still can't be called a good trade.
The only objective of such a move is to avoid losing more money, but that doesn't mean it was a good trade.

Sometimes a trade that is losing money can be a hedge for another position that is making more money, and that's ok.

You keep referring to a "system" and a "plan" - what is this system that you are following?
Have you designed this system on your own, or is this something you learnt at a seminar or in a book?
Does it involve making money at some point?

[Snuff_the_Rooster]

50% of my days more or less are spent losing money. If you follow your plan and execute it it doesn't matter if you win or lose.

Ask people how holding NT went - i'll bet they tell you they wish they had got out at only a 50% loss :-) selling for that huge loss was the best trade they could have made whether they knew it or not which if course only a rear-view mirror could have told them for sure.

The big issues here are always the same ones everyone have but refuse to see it for what it is. First and foremost as we all agree with, is that you're dealing in junk. OK, we're beyond that. That's easy enough to fix.

Possibly an even bigger problem are that no-one really has a good plan. Oh, they've got a plan, but it likely blows. If you do have a definable plan then you have a good start. I can't know that from where I sit but your options are to either trade it or back-test it a lot and see how good it is statistically over a fairly lengthy time period.

This is the harder part. You can avoid 90% of your problems by being hedge appropriately and that doesn't include that dec 2014 SPY put you have. That is next to useless. If it were me I'd dump that thing today for gains and walk away and find a proper hedge if you still want or need one after what's happened today.

[Argonaut]

I've seen a few posts lately where the user is content to lose the entirety of their trading account. Why? With that kind of attitude, you will lose it. Why not keep it in cash and read a book instead? You've got to have that fear of losing money to stay sharp. Like the new Batman movie says, sometimes fear is a good thing. Let's tighten up around here, we want everyone to make money.

[MoneyGal]

50% of my days more or less are spent losing money. If you follow your plan and execute it it doesn't matter if you win or lose.

If you follow your plan and you consistently lose, it matters.