I love the smell of blood in the morning. To wake at dawn and find your order filled, a steady stream of red staining your screen, and as the day progresses to the inevitable climax, when at five in the afternoon your first targets are filled, and you witness the dying dreams of the bull felled by your skill, kneeling, panting, looking dolefully into his killer’s eyes.
OK, let’s not get too poetic here, but what better way to start the week than with a three hundred point fall in the Dow, with a position that took no heat even as I slept? Short overnight from the break of Friday’s low, I have had a good day. I got a nice entry, got out of half, and got to move my stop to break even, so I’m not going to get gored in the groin, even if the bull does lumber to its feet again.
Yet still it is not enough. The pleasure of a clean, well-executed kill, of dispatching an animal that behaved perfectly, is always tempered by regret. I am not just speaking about the tragedy of exits: the sadness of scaling out when it goes still further, the sorrow of the trailing stop that gives back so much. All this is the necessary regret that every winning trade must bring; no, it is worse than that. For once again, I am in mourning for the Euro, for the one that got away.
How did I miss thee? Let me count the ways – I should have been short on Friday morning, from early in the European session. My setup was coming together in multiple time frames, I was relaxed and confident, and had a little extra time on my hands. I thought I would watch the market review offered by a well-known and likeable commentator who was cheerfully bullish on the Euro. A shadow passed over me. I don’t listen to others when I trade, I know that I have often found myself in conflict with this other trader’s analysis and come out on top, and yet it is curious how little it takes to sow the seeds of doubt in your subconscious when you let your guard down. Once the intellect and the rational arguments of others had started to interfere with my judgment, my resolve weakened without me realising it.
I should have left my orders in place and gone about my business. Instead I scratched my chin, looked at a couple of e-mails, and decided to make a nice cup of tea and to shave. Perhaps my pattern was not as clear as I thought. Why not leave it for a little bit to mature like a nice Camembert (it was a Euro trade after all)? Nothing would happen in the next 20 minutes, and I could be back at my desk before whatever dull news announcement there might be at half past.
Of course, what with one thing and another, it was more like 40 minutes before I was back, the Euro had rolled over along with the other currencies, and my entry was gone. The pain is doubled by the fact that this is the second big Euro trade I’ve messed up in the last few weeks.
So how did it really happen? Was I unconsciously repeating the previous experience in order to relive the pain of the unrequited trader? Was I afraid of the trade, and looking for other reasons to be elsewhere? Did I let the fellow who wanted to be long get under my skin? Well, I haven’t had a chance to talk to Denise at length about it yet, but I suspect all of these, and probably something else too. Whatever it was, it bugs me far more than today’s success. And to make things worse, I cut myself shaving while I should have been trading. So there really was blood that morning too.