Yesterday in a daily trading review a trainee wrote with disgust about giving back too much of his early profits.
I really hate what I did today… basically gave back 90% of my net on the day by trading like a jackass. It just started with one bad trade and snowballed into a few more, and before I knew it, I just quit for the day. It’s a shame too, I thought I was trading really well with CIE and ORCL. Mid-day,I nailed that CIE reversal and I called out the 14.80 breakout on INCY and it seemed like I wasn’t doing much wrong, then I made my worst trade with too much size (buying immediately into a pullback on INCY) and it just got worse from there.
The rest of his review consisted of a lot of I am a jacka$$ this and that. He’s not and my response was:
this is not an issue of you being a jacka$$
this is you not having a giveback rule
you were up $$$ (P$L numbers redacted for compliance reasons)lose $$$$STOP TRADINGTIME OUTcreate a rule for yourself
Steve earlier in the day told me about coaching an experienced trader to shut it down. He was up nicely, lost some, lost some more. Steve pinged the trader cautioning not to give back more. The trader gave back more, and then a little more. Steve personally went over and suggested to close it out for the day.
Later I wrote this to our desk:
Guys I am seeing the same issue and spotting the same prob on the desk. If you have a positive open and you give back 30 percent shut down your trading for the day or at least until after a long time out. It is very common for HFs to shut it down for the month or week or quarter after such a give back. Develop a giveback rule for yourself and send your personal rule to us.
One trainee responded:
As a developing trader, I will not give back more than 50% of what I earned on the open. In the event I breach the 50% rule, I will close my lightspeed account for the day and analyze what I did wrong. As I increase share size, this rule will be reevaluated.
What is your giveback rule?
Bella
no relevant positions
