I am a Complete Idiot!

BellaMike Bellafiore's (Bella's) Blogs, Trading Psychology6 Comments

So today I strolled onto the trading floor, noticed MMR had gapped up over a buck, hit the bids taking my profits, and then grabbed some water for my ecocanteen (been reading some scary stuff about drinking out of plastic bottles). I rustled through some stocks to trade: CREE? IBM? WFC? MMR? RMBS? AET?

Would the insurers be in play again because of the Brown upset in Massachusetts? (I was shocked when his daughter got voted off of American Idol btw.) Some of the financials were in play because they reported. China sent bad news overnight that might cause weakness. IBM below 132.50 was a stock to trade on the short side after it reported. CREE was interesting for a pullback or opening drive having crushed their numbers. Maybe this MMR would continue higher? This RMBS sure was interesting gapping up and nearing a longer term resistance level of 24.

And being the jackass that I was I picked the wrong stock for me. And it made all the difference.

After the Close our new traders met in our training room to discuss mental preparation for COH and CREE before today’s Open. Actually we were supposed to hold a VRS but I changed things up. I shared how disgusted I was with myself for choosing so poorly on the Open.

“I don’t want to look at myself in the mirror. I don’t want to hear myself talk. I am completely disgusted with myself. I can’t believe I did not focus on IBM.”

One young trader not quite catching on to my mental mood asked,”Bella how come you didn’t trade IBM on the Open.” (Who recruits these kids? 🙂

I responded,”Because I am a complete idiot!”

And I was. There is no excuse to miss this IBM trade. I traded it in the After Hours. Below 132.50 was a stock to trade with a short bias as IBM failed there in the After Hours. The Market got VERY weak. IBM, a market stock, would trade lower just because of the weakness in SPY. And what was I doing?

I was banging around in RMBS, a stock that did not accentuate my trading skills today. RMBS had just one more downmove in it for me whenever I had size.

I have learned to use my personal disgust to improve as a trader. It is healthy for me to feel so disappointed. I am not interested in spending another day frustrated when I could have been laughing it up in all things short IBM. I will remember my mistake, take corrective action, and come back tomorrow ready to compete.

Long RMBS, Long GERN.

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6 Comments on “I am a Complete Idiot!”

  1. Bella:

    Wouldn’t it be great if we could all channel our inner buddhist monks at those moments. 🙂

    IBM was actually extremely whippy on the open fluxing 30c at a time.

    I would like to get your opinion on this, if 132.5 is the level and it gapped down to 131.0, a multiday support, would you still be focused on shorting this stock 1.5 points away from the level?

    Also, could you enlighten me why GERN is a long, there doesn’t seem to be much movement on the Charts to daytrade this stock, unless we are talking about a swing trade.

    Regards,
    Tapetrader

  2. Bella:

    Wouldn’t it be great if we could all channel our inner buddhist monks at those moments. 🙂

    IBM was actually extremely whippy on the open fluxing 30c at a time.

    I would like to get your opinion on this, if 132.5 is the level and it gapped down to 131.0, a multiday support, would you still be focused on shorting this stock 1.5 points away from the level?

    Also, could you enlighten me why GERN is a long, there doesn’t seem to be much movement on the Charts to daytrade this stock, unless we are talking about a swing trade.

    Regards,
    Tapetrader

  3. We can learn very much from a bad day, especially from a trader like you. I understand it was a bad stock and it moved against you whenever you had size on it, but there are some questions: why you chose it? how you come to realize that it was a bad stock? why were you adding on it (because I am sure you saw something on the tape)?
    And after all this is was a mistake or it was simply that x% of trades from your strategy that doesen’t work?
    Again, I learn a lot from your posts on the good trades, but a post with technical explanations about a bad day it’s of tremendous help!

    p.s. are you sure the guys from the floor didn’t curse you for your good time on the beach? 2 bad days…this should raise some questions 🙂

  4. We can learn very much from a bad day, especially from a trader like you. I understand it was a bad stock and it moved against you whenever you had size on it, but there are some questions: why you chose it? how you come to realize that it was a bad stock? why were you adding on it (because I am sure you saw something on the tape)?
    And after all this is was a mistake or it was simply that x% of trades from your strategy that doesen’t work?
    Again, I learn a lot from your posts on the good trades, but a post with technical explanations about a bad day it’s of tremendous help!

    p.s. are you sure the guys from the floor didn’t curse you for your good time on the beach? 2 bad days…this should raise some questions 🙂

  5. Tapetrader,

    GERN is not a great long until it gets above 6.30 and then 6.50.
    IBM below the important 132.50 level was a trade with a short bias. That does not mean force
    a short if you do not find a set up so far away from resistance. It means for me to find shorts
    from my playbook to execute now that IBM violated this important level, found by watching After Hours
    action.

    Great questions.

    Mike

  6. Tapetrader,

    GERN is not a great long until it gets above 6.30 and then 6.50.
    IBM below the important 132.50 level was a trade with a short bias. That does not mean force
    a short if you do not find a set up so far away from resistance. It means for me to find shorts
    from my playbook to execute now that IBM violated this important level, found by watching After Hours
    action.

    Great questions.

    Mike

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