Yesterday I made a silly mental mistake on the open that cost me my morning. I was expecting a small downtick on the open before the rally so I tried to get too cute. I shorted GS on the open. I was trying to catch the first down move so I could have plenty of leeway for my long for the day. That backfired big time. The stock didn’t downtick for two points on the open. What a rip.

It wasn’t that this was a bad idea. It was that I got too hooked on my idea and wasn’t fast enough mentally to execute my plan B: play the stock as if it was just going to rip to the upside from the initial prints. It was a rookie mistake but I didn’t let that determine my day.

Instead of spending a ton of energy for being mad at myself for being silly, I channeled that energy to help me focus for the next couple of trades. If you’ve gotten punished in the past chasing stocks after missing the first move you would understand how bad this can be. We’re taught to wait for the pullback but what if I never comes? Our patience turns into anger and then that leads us to try to get silly to try to fade the move. Luckily this wasn’t the case for me today. I was able to get my head together and found a way to make the money back plus some.

Just so we are clear here, being too cute means trying to catch every single up/down tick on a play. Say for example that you’re expecting your long play to go up two points and the stock is now trading about half way there. Now you start to notice that there is an identifiable seller that could make the stock come down 20-30 cents. When you get too cute you would sell out of your long, flip to the short side and try to catch the 20-30 cent downtick and then flip back to the long side. The problem with this is that if you’re not fast enough when the seller lifts you may be forced to take bad prints on your short and flip, and now you have to deal psychologically with having a long position at a bad price.

The main thing I want to get across here is that if you are a short term trader like me you must work on those plays where you try to be too cute. In fact, if you are fairly new to trading you must avoid being cute at all. 90-95% of the times I get away with being cute just because I know I can flip my positions fast enough. I make my short-term plays based on risk/reward and probability of the play working out. Today’s play met my requirements, but I failed to be fast enough and I couldn’t execute on my plan. Ripper.