Tuesday, November 23, 2010

11/23 Daily Summary

I've started a self-assessment as part of my daily routine, the goal is to flag situations that bring me in a negative state and what can I do in order to improve both my feelings and overall well-being. Needless to say, I'm a bit unhappy with myself Today after the market rolled down just after I hedged the up-side risk. This is one of those things that one must master: the ability to be consistent with what you do, and the ability to manage the future and not dwell in the past, so this would affect me a lot more in the past, it bothers just a bit nowadays.

The position is in decent shape, don't get me wrong, it will make money. What bothers me the most is that I've set myself up with the evening game plan and use of contingent orders to help me navigate the day-by-day of trading. I've realized several months back that decision-making during the "lunch hour" for me was not the right approach. I've decided it was best to get hit on an overnight gap than trying to predict the next morning's action based on a 5 minute look at the market. Hence the contingent orders. Yesterday when I pushed the order manually I broke my own rule. Of course, the market took no reservations in pulling back.


Anonymous said...

I didnt think your long call was a bad adjustment, the market closed near its highs and was near your adjustment point. What would your P and L look like if the NDX gapped up 20 leaving your contingent orders mute, you would be in the red. The only question I have is why the 2000 call over the 2250?

Gustavo's Trades said...

I looked at the market in the final hour/minutes and wanted to give the hedge a bit more punch. This was probably influenced by watching the market action and "expecting" the next day to be bullish..

That was proved wrong the next morning, and a day later we punched higher. Hindsight is always 20x20, but I did not know that back then.. It was mostly making a change based on market conditions.

This goes back to having to make decision in a matter of minutes. That's why I like to avoid doing so in the final hour.

I'm usually fresh and focused in the morning: I work out and watch the market (when I can) for about 30 minutes before 8 AM.. During the lunch hour I'm much less focused, there is tons of work-related stuff in my head, I'm heavy from lunch, etc, etc... So the decision-making is not the best.

If I have to trade by end of day, say when I'm exiting a position, I like to plan my trades the night before or the morning before and just execute the "script" during lunch time.