What is the absolute worst case scenario for a trader? Is it an earnings miss when long some calls? Is it shorting when spiking and buying when tanking — bad timing? Well for me the absolute bane of trading is entering the arena a success and leaving a loser. It’s akin to standing over your enemy in triumph, turning your back to celebrate with the crowd, only to see said enemy rise up and cut your face in half.
I’ve had innumerable days like that in my trading career and they’ve always made me feel the absolute worst. Since I am a deeply empathetic person, I feel everything orders of magnitudes more than you, the unwashed reader.
I had a vision today with me sitting in front of my laptop, harangued by losses after some early wins. It started to manifest itself mid-day as markets broke lower. I was leveraged long and up 240bps for the session, mostly arrogant and unperturbed by the chaos unfolding around me. But then the market worsened, taking some of my gains with it.
I watched in disbelief as +240bps melted into +200bps and then +190bps and then +150bps and then +130bps — causing me to quickly hedge to stop the bleeding and then reflect.
I thought to myself “If I stepped into today and made 1.3% — would I be happy?”
The answer was of course yes.
I then asked “if I allowed these losses mount to the point I lost all gains — how would I feel?”
It would likely send me into a weeks long trading slump, so I did the mature thing and liquidated all of my longs, closed half my shorts at a profit and waited for 10 mins to the close to positions into tomorrow.
In the end, I closed up 148bps, net short and with a defensive book, which can be amended quickly at the open tomorrow. After the bell both $CRM and $SNOW beat — so barring some bullshit calls — it looks like the NASDAQ will surge ahead tomorrow.
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