Well, I have said time and again, “If you trade long enough, anything and everything will eventually happen…both good and bad.” We had one of those bad nights last night which reinforces how fickle the markets currently are and why I have opted to keep risk very low at 0.5%. We went into last night long 3 stocks, one of which was DBRN. DBRN gave a profit warning pre market and the stock gapped dramatically lower causing a loss almost 5 times what we had budgeted for. The stock had a 10% trading range in the opening 1 second. It happens.
Rather than slitting wrists what we need to take away from this is that although it hurts and its unpleasant, we’re able to come back and trade another day because we never ever place trades that will put our trading longevity at risk. Creating a positive expectancy is a long term task. With it comes small periods of trauma and elation that must be dealt with and I believe the ability to deal with this is the difference between a successful trader and one that continually struggles for success.
Because this blog is about transparency, here is the warts and all chart of the DBRN trade:
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Here is the DBRN fill from our broker:
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The account dropped almost $1000 due to DBRN putting our ROI now at 4% since October 1st.
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Next trade please…
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