Whoa! What a DAY! Today is the day I count my blessing. While the SP500 future index was generally trading downward in the morning hours, I was having a difficult time getting reasonably good fills. I got stopped out on a trade (buy stop) that stiffed me for an additional 2 points loss beyond my stop price. And to add salt to the injury, this happened on normal trading activity and NOT on a fast market. I found this very unusual and disconcerting. Disconcerting enough that I decided to call it a day and walked away from the SP future index.
Looking back now, this 2 points additional loss from a bad fill is my true blessing! For if I have remained profitable in the short side of the trade and rode it down with the trend; I would have subjected to a horror drama that all traders do not want to participate and experience in. I watched the SP future index, within a span of 4 minutes and 40 seconds, moved 60 points! (From 1300 to 1360)
For those of you who are not familiar with the value of a 1 point SP Index move, a 1 point move on the SP index is equivalent to $250.00. Thus, a 60-point move is equivalent to $15,000.00 per contract! And if you're on the wrong side of this monster move, which is totally unexpected, even your stop loss order is useless to get you out of this horrific jam. Usually, your stop loss will be filled as the worst possible price.
I got stung once during the Iraq and Kuwait incident when the word "regret" was uttered thru the media when Saddam Hussein refused to withdraw his troops...luckily, I wasn't loaded up then; otherwise, I wouldn't be here sharing with you my hard-earned experience... <g>
Here lies the danger of trading; there exist this dangerous "black hole" that could suck you into oblivion if you're not careful. "Yes, we definitely want to keep our greed in check!"
I'm amused at the fact that there have been much talks about who should be getting credit for making the right calls…. up, down, sideways… whatever…. well…. the way I look at it, everyone one of us, traders or investors, is a broken clock that is entitled to be corrected twice a day not because the clock is moving correctly but because time has moved toward it. So, the hero in the storybook is not the one whose broken clock happened to show the correct time but the one who has the gut to actually put the money on the line, take the risk, and make a killing or save him/herself from a portfolio meltdown when he/she has the prescience to sense that his/her broken clock time is approaching the real time.
What does it really matter if Rande Is or Softies make or lose money? As far as I'm concerned, the real issue is whether you, yourself, are making or losing money. Did I learn something from my mistakes? Am I paying too much tuition for my lessons? Am I relying too much on Mr. X or Ms. Y on their picks? Am I doing everything right when I make money? Do I have the necessary discipline to cut my loss quickly? These are some of the real questions we need to ask ourselves instead of asking if Mr. X or Ms. Y make or lose money.
Again, the focus should be inward and not outward.
Ooop, I guess I babbled enough already.
And to end my little contribution here, I wish everyone a healthy year first and prosperity second. For without health, there is little need for prosperity.
In light of my today close call right in the beginning of the year, I will dub Year 2001 to be the "Year of Trading Dangerously".
Be careful out there! |
