Pain and Confusion

For those of you who have been waiting for a long post .. you are about to get one. I finally have some time this evening to share what has been going on with my trading job. Of course, I will have to quit when American Idol starts, but I will see how far I can get.

First off, this is the most mentally challenging job I have ever experienced. I can't believe the frustration that takes place when I make losing trade after losing trade. Tuesday was especially rough for me. My winning percentage was a miserable 9%!! Yep ... you read it right. 9%!! That means if I had picked the other direction to trade the stock, I would have won over 9 out of 10 times. My performance is absolutely pathetic. In total, I was down $190 on Tuesday. For some reason I kept envisioning the scene in Rocky III, where the ring announcer was interviewing Mr. T. The announcer says, " Clubber, what is you prediction for the fight?". He looks straight into the camera snarls his lips and says ... "Pain". I just imagine someone playing the role of the stock market and saying the same thing when asked "Mr. Market, what is your prediction for David's performance today?" One word .... pain.

Needless to say, I tried not to get rattled, but Tuesday's performance combined with a 31% win percentage performance on Monday really had me a little gun shy this morning to start off with.

However, I told myself I had to work my way through it, so I placed my first trade. Literally, no sooner did I place it than the position jumped against me by a dime. Two seconds and I was already down ten bucks. (I am still onlly trading 100 share blocks .. thank goodness). I immediately got out. If I held the trade until the end of the day, I would have made $90. It spiked against me, I freaked out and closed the position. It is true when they say that trading is mostly mental. I didn't trust myself largely due to the poor performance from the past couple of days.

The next trade .. the exact same thing happened. No kidding. By now, I was so upset and frustrated with myself I couldn't stand it. I looked for another trade and told myself I was going to do the exact opposite of what I thought I should do. About 10 minutes later I found one. I placed the trade, and you guessed it .... it went against me too. By now, I was hearing Mr. T say "Pain" .. so I stopped for the rest of the day and watched the market. I looked at several different tickers/triggers for trading opportunities. I took lots of notes in a spiral notebook which I am going to review tonight. I really studied what was going on, and I feel like I can do much better tomorrow.

I felt good about making this decision, but my coach was not happy. I only traded 600 shares today and he proceeded to tell me that I must trade more and figure out what works and what doesn't. I understand where he is coming from. He mentioned the person who was there before me (but has since quit) had a similar analytical background as mine and she overanalyzed everything. I told him I was aware that this might pose a problem for me, but proceeded to tell him exactly what I thought. I told him I wasn't learning anything about trading because I have not been able to learn from my mistakes. I keep doing the same thing over and over again. You would think that it is simple to stop, but it isn't. I need to be able to spend time after the day to review my trades and I haven't had the time to do this. I told him I was taking notes today and reviewing it this evening to see if there was something that could help me from making the wrong decision. He really didn't buy my line of reasoning. He feels the only way to get better is to get in there and trade and work your way out of it. I respect that, but if I am beating myself up when I do that, I need to do something that makes me feel good about my progress, and that is what I did today.

I want to draw an analogy to volleyball coaching with this situation. When I am teaching a player to pass (bump) the ball correctly, I don't just tell them "Pass into the basket." I give them constructive and technical feedback as to how they achieve this goal better. I understand that as a player you have to teach yourself what feels good and what doesn't and make yourself better for the most part .. the coach can't do that for you. The one way you get better is by repitition ... there is no doubt. But I have also noticed when I was playing there were times when less was actually more. Going to watch a volleyball match or visualizing what to do, helped me more than actually practicing. I would like to think that is what I was doing today. Perhaps I should have shared this analogy with my coach .. I wasn't that quick on my feet. But I will be sure to remember next time (if I am able to improve my performance tomorrow).

Regardless, I am little disappointed my coach didn't really offer me any type of technical feedback of what I could improve on. He simply said I needed to trade more and left for the day. I suppose this is like me saying to my volleyball players, "OK ... keep passing into the basket. Oops .. that one didn't go in ... keep trying." I don't think I would ever say that. I would try to help them fix it. Maybe I should have asked him to review my trades with me at the end of the day ... I don't know ... he seemed in a hurry to get out of there. Plus .. the last 2 days combined ... he is down over $6000. I am not sure if now is the right time to be asking him for advice. Don't get me wrong ... he is a nice guy ... but I don't know if he will ultimately help me become a better trader. I think that is something I am going to have to do all on my own. And I felt like I took steps toward that today.

So .. my plan for tomorrow and the coming days:
1. Review the news in the mornings and write down stocks I think should be active during the day. I actually did that this morning but didn't act on any of my "predictions." And ... who would have guessed .. they would have paid off big. I wanted to buy "Casinos" and short "Restaurants". Coulda, woulda, shoulda .... there is always tomorrow.
2. After each trade I make, I am going to keep a journal and give the reasons for getting in and out of each trade.
3. I am going to review the journal each night and see if I can see what went well and what didn't.
4. I am going to read for at least 1 hour each night to learn new trading strategies and mental techniques to stay sharp, focused, and positive.

So ... there you have it ... my new roadmap. I am tired of hearing about how being analytical is going to hurt me. Screw it! I am just going to work harder than I ever have in my life and prove to my coach and everyone else that I can be successful. It is not about analytics but hard work and effort. I am going to do it!