On my first day back to day trading I must say that I wasn’t impressed with how I reacted to a losing position and it nearly ended up costing me.

I started off the day entering POT, CF and STP.

Both POT & CF I traded quite well and they both showed profits right away. POT I traded before the first 1/2 hour of trading which went against one of my rules but the set up was quite nice.

STP on the other hand wouldn’t budge and I stubbornly held on and at one point had a $400+ loss (look at my rules on the right and you’ll see I shouldn’t take a loss higher than $200). I kept trying to justify on each chart to hold on a little longer. It ended up not too bad but this is not how I want to trade at all.

I also entered trades in RIMM and MELI while in the STP position which went against my “3 trades a day max” rule. And again, as with STP, I let RIMM run into a bigger than $200 loss. I really need to work on this psychologically.

Here is the screen shot of my trades without the commission costs factored in.

Commission costs on the 10 orders were $70.00 so my total profit on the day was $426.68.

Now for the daily self-evaluation:

Pros:

1. Was patient on both the CF & POT trades as I watched them pull back to support levels. MELI was also a good trade near support.
2. Even though I let both the STP & RIMM trade go beyond my “$200 max loss” rule, I realized the mistake in that and was able to take a loss at the end and not wait for the trade to turn a profit.
3. I wasn’t too greedy and took profits that presented themselves.
4. I didn’t fight the trend when entering each position. All the stocks were up at the time I went long. As was the market.

Cons:

1. Allowed both RIMM & STP trades to spiral into losses greater than $200. Kept trying to justify the STP position even as it kept breaking each level. I cannot do this if I am to be successful.
2. I held STP way too long and it wouldn’t break to the upside. I need to recognize and act on this pattern where a stock just doesn’t go higher even though it teases you with quick spikes up. These are head fakes which give me glimmers of hope which is the wrong way to trade.
3. Over traded. I took the RIMM & MELI trades based solely on the fact that I was down on STP. If both trades turned sour, my losses on the day could have been quantified. I need to stick to my 3 trades a day rule no matter if I’m positive or negative on the day. This also shows the importance of the “taking a loss if down $200″ rule because if you break that, it’s easier to break the others and thus you dig a hole for yourself.
4. This is a minor one but worth mentioning. The POT trade was going my way right away and I sold into the run-up to soon. It wasn’t showing signs of weakness when I put in my order so I need to work on letting winners run a little bit longer. The best case scenerio would be to set a stop higher then my entry to protect some of my gain and let the price action work for me.

Overall, I’m happy to have a profitable day but I really need to work on not letting a loss run. If I don’t than I will get burned big time.