Of late I have become increasingly interested in the psychological side of trading. My fundamental belief is that I am not a good trader because I experience too many conflicting emotional overrides when assessing a trade. These generally are just before I open or close a trade. If I plan ahead I can avoid this but then the execution moment arrives. I’m currently reading Curtis M Faiths “The Way Of The Turtle” which I highly recommend. It analysis some of these issues in a cold calculated way which is essential to the art of a good trader.

Last Friday I was watching the US close, options expiry and FTSE peaked above 4315. Now my entry was to be above 4300 as logged by my trade diary. Instead of systematically and coldly realising my entry and executing a strange thing happened. I was about to watch a film and said out loud “I won’t bother it will go higher” and proceeded on with my evening. What bemuses me in hindsight is the flippant way in which I disregarded two weeks of planning. This was raw greed and nothing else. For a few extra points I was willing to sabotage my trading plan. And sabotage I did as FTSE 100 opened Monday lower and plunged 6% and is still on it’s merry way lower. I missed the mother trade over stupidity and greed.

So the question is will I learn from this? Should I have placed a buy order to avoid this character flaw? These are the things that interest me because it’s easy to say yes I will learn but will I? This has cost me around 600 Euro but that isn’t the annoying part the annoying part is that I had a plan and the plan would have worked. Plan your trade and trade your plan.

Hopefully going forward I can exercise some basic rules and methodically and mechanically trade my plan. It is a very basic premise but one that is so easily affected by emotion.

I seem to have developed an amazing ability to close my shorts as the momentum moves lower. I’m currently in a situation with no shorts after closing my last two short positions for a small loss. Why? I’m really not sure. There was a large move higher and I thought I would get a better chance at a short at a higher level. Greed, naked greed.

So now I’m sitting back watching the markets move lower without me and the lovely 13 euro position I had built up. If ever there was an example of bad timing I seem to have become it. For now sit and wait.