Midday TradingNov 19th, 2008 | By Bella | Category: Mike Bellafiore's (Bella's) Blogs
I had a nice morning trading RIMM on the Open. Tough stock, but as I like to make sure everyone on our desk knows…. I am fast and agile. So RIMM is not too tough of a challenge for me. After the Open, I got up from my desk and took care of some firm business. And then I sat back down around 11am and made a few trades. I have to admit I am very tough on myself as a trader. Perhaps too tough at times. And I always judge my trading based upon my actions and not my results. But what I did midday today was unacceptable.
During the midday unless my stock will be in play the entire day, or I see a setup that offers an unusually promising risk/reward, I do not trade. I spend most of my time sitting on my hands. I spend most of the midday preparing for my trades into the Close. I only make a trade if my risk/reward is outstanding. On the Open I make many more trades. My standards to make a trade are not as demanding. It is rare where intraday traders have an edge midday. The order flow is low and programs dominate. So I don’t trade much.
And yet today during the midday I lost my discipline. Losses do not bother me. Taking a rip does not bother me. But causing my own losses does. Losing my discipline is rare for me and completely unacceptable. And I failed for about 45 minutes today from 11am to 11:45am.
Around 11:45am I just stopped myself. RIMM was not a good short or long at any moment during this time period. My gains from the Open were erased. Actually it was more that I was pretty hungry than I stopped myself. So I guess then it was a good thing I got hungry. Because I would have just lost more.
So I went to lunch and I thought about my AM. Now a ton of new traders at this point may start thinking that you are just not a good trader. You might let your mind conclude that you just hate that RIMM. You might blame some kid who sits next to for bringing up the Jets game this weekend. Some conclude that they are just morons!
I concluded that I made a few mistakes. I made no conclusions about my trading ability based upon those 45 minutes. I acted in my own self interest. I analyzed what had happened and identified my human error. And I concluded that if I did not overtrade RIMM during that time period that I would have had a nice Open. I concluded that I can’t do stuff like that again.
Bad traders will let those unfocused 45 minutes snowball. They will lose more during the midday. They will continue to rip it up into the Close. But I just ate some lunch and recognized my errors. And I had a nice close. And my brown rice, turkey burger topped with lentils platter, was delicious. And as I write I am confident that I will trade well tomorrow and have another nice trading day.
GS did not trade below 55 into the Close. That should offer an interesting level off of which to trade tomorrow. GS is 2 points away from its IPO price. That is amazing. What a new world we live in.
Best of luck with your trading!