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Rookie Blog: Procrastination Costs Money!

September 2, 2021

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Good Day Rookie Bloggers! I come to you this week with my head held low. As Alan says in the movie The Hangover…”Sorry Guys….I fudged up!” You see, this week when I was performing my trading work I made a decision that ended up having a direct effect on my bottom line. I am also willing to bet that I am not the only one to have done this or made this mistake and I share it with you this week in the hope that you won’t end up making a similar gaffe. Let’s dive into this rookie-like mistake and then you can probably get a chuckle but also maybe ensure that your bottom line doesn’t take a similar hit as mine certainly did.

I am certain that you all have your own daily routine and this should include at least the following items. A solid review of the overall markets using either the futures contracts or the ETF’s of major indexes followed by a good review of one’s portfolio to ensure that the breadth of the portfolio is similar to that of the market posture. After making any necessary adjustments to the portfolio such as moving stops or closing positions that have reached their potential or are getting into a posture that could cause damage to one’s capital. The next step is usually to comb through watchlists to see if there are new trades that require our attention. This is typically the exciting part as we get a new potential for increasing our portfolio equity. This is where I ran into trouble, well maybe not trouble but where I “fudged up.” Take a look at the chart below and then I can describe what I did in detail and this should make more sense.

$TWTR chart

This is the first chart I saw that I liked. This showed a budding reversal pattern and by that, I mean that the recent downturn appears to be making a turn. It had broken the falling trendline and has at this point already pushed above a couple of the moving averages and these signs are positive for a bullish type trade. This was the heads up that a trade was imminent and this should have been where theory meets action. This is the beginning of the mess-up. You can see a white line at the resistance level that I have identified and at this point a trade could be set up and should be set up so that if the next day TWTR took off I would be profiting from that movement. I knew I should do this but I allowed myself to get distracted and I did not place the trade at that point. When I say to place the trade I mean to enter the trade but not necessarily trigger as we need confirmation before we enter a trade. Take a look at the chart below to see what happened next.

$TWTR chart

If you look at this chart you can see a red Doji candle and this is a sign of indecision of market participants. When I actually looked at this trade on this day the candle wasn’t actually a Doji and it was actually more on the downside of the day range as I saw it intraday and not at the end of the day. At this point, I could have again set up the trade but seeing the red candle and thinking I might get another pullback I decided to wait again or technically I moved on to other trade setups planning on coming back to this later. This is a classic case of procrastination. I knew this was a good trade set up and I should have gotten ready to benefit from this trade. Take a look at the chart below to see what happened next.

$TWTR chart

As I am sure you would have guessed the stock exploded the next day. This is exactly what I was expecting to happen from this type of set up and I believed this because I have seen many similar setups like this and this same result tends to happen often. Our job as traders is essentially to find the best setups and then enter the trades and benefit from the results. As you can see I did the first part but allowed myself to procrastinate on the second step and missed out on a quality trade. This is a rookie mistake and I am anything but a rookie but as you can see that if we don’t remain disciplined as traders we can miss out on golden opportunities.

There are really two lessons here in this situation. The first is that discipline is paramount to successful trading. If I had exercised my discipline then I would have put this trade on and thus far would have been in a winning trade. The second lesson is that we need to always be vigilant about keeping things like procrastination at bay. Even though I am an experienced trader I am not immune to making mistakes but the signs of a successful trader are the ones mentioned above.

Trade Well,

Coach “Old Money” Holmes


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One Reply to “Rookie Blog: Procrastination Costs Money!”

  1. GustavoLozada says:

    Excellent article Greg. Thanks for sharing.

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