Gross PnL: -$30527.
Net PnL: -$31543.
I was quite proud of the fact that I hadn't been too beat up by DRYS on the upside (prior few days). To be honest it was luck because I had big positions that came back instead of squeezing out. I had some poor entries and therefore not clean stops.
As I'm writing this I am watching these shipper stocks completely crumble the day after this - so it really sets in the lessons learned. A patient, disciplined; only adding size once already a winner version of myself would have crushed today - with virtually no downside because of the adding to a winner and the clean places for stops.
I spent the morning mentally preparing for a big trade. I was aware that if I messed it up that I could blow-up; but estimated the probability of success extremely high. Of course hindsight, you never want to put your career on a single trade idea/theme... I knew this and went through with it anyway (arrogance/cockiness/overconfidence?). So this is just flat-out stupid!
Then DRYS was halted pre-market. Not a regulatory, but Nasdaq requesting more information. I took this as a sign that the shipping run was over. Indeed the basket that I was watching all dropped sharply. So I maxed out buying power and shorted a basket. And got squeezed.
Ultimately the fault lies in:
(1) Over-confidence (not being prepared for the outcome of losing trade).
(2) Wanting to crush entire move with full size.
Solution: Don't be so reckless. Starting with medium sized position would have ended up stopping me for a moderate loss. Come in the next day with same strategy by adding to a winner (slowly/patiently) I would have made just as much for about 1/30th of the risk!
Essentially I have some habits that I have to correct which may take up to a year or maybe more. That is:
(1) Fomo/greed caused me to take a massive position right off the bat. Need to get rid of that and let things play out.
(2) It will help to place stop-losses before I place entry order.
(3) Need to develop the habit and discipline not to exceed max size.
(4) More respect for risk.
Here are the charts including next day action: Shows clearly that adding to a winner was much lower risk. Have also included the positions I had on in my reckless moment.
One thing watching all these stocks plummet in a predictable and easily tradeable manner has done is re-awakened my passion. After the blow-up day I wasn't sure if I wanted to continue trading. Now it is clear that I definitely do!
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