If you were a Contract-For-Difference (CFD) trader or a share trader, which one is more “painful” to you?
1. The trade that you entered goes wrong, hit your stop loss, and you lose money; or
2. You have spotted a winning trade but you did not get on board because of some mistake you made and you miss out on a huge gain?
For me, number 2 is much more painful. Why? I don’t really mind about number 1 because I have a capital management model put to place, limiting my loss on every trade (assuming nothing serious happens of course). I also have accepted that losing money on bad trades is part of the life of being a trader. Remember, there’s no systems or methods out there that gives you 100% success rate!
However, in number 2’s case, if I miss out, I’m missing out on huge gains. Sometimes 1.5 times to 2 times more than what I’m risking on every trades. Also, not entering trades based on the entry signals that your system or method has generated can skew the long-term result of your performance.
Today’s post is for me to express my utter dissatisfaction over my carelessness with some of the winners that I missed out on. The most recent one was… well, a few days ago. It was all because of the fact that I woke up a bit late. Just 10 minutes late. Of all the days, it had to be on that day.
Let’s have a recap of what I have missed out on so far:
1. Wesfarmers trade a number of months ago. This was due to the fact that I did not react fast enough. The trade was supposed to be entered in the afternoon and exited just before the day’s close. I missed out on… approximately AUD700
2. AUD/USD currency pair about a month ago. By the time I realised that an entry signal was triggered for this one, it was already too late. The trade was supposed to be exited about a few hours after with a profit. I missed out on…. approximately AUD700
3. Mount Gibson trade. I missed out on approximately AUD1200. Reason: I overslept! Bugger…
Missing out on a trade because of carelessness is as good as a loss to me.
Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.
Other related posts:
– CFD Trading : An Introduction
– CFD Trading/Share Trading : Setting Stop Loss
– Investing & Trading. What’s the difference?
– CFD Trading/Share Trading : Stop Loss in Perspective
– CFD Trading/Share Trading : Being Long and Short (Concept of Short Selling)
– CFD Trading/Share Trading : Short Selling in Perspective
– CFD Trading/Share Trading : The 2% Rule