For years I had the same problem. I’d make money and then give it right back.
After a big win I’d feel invincible. Then I’d watch my gains slowly drain back into the market over the next few trades.
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It happened often enough that I couldn’t just write it off as bad luck.
So I took a look in the mirror…
At that point I had already been logging every trade I made on Profit.ly and a spreadsheet. So I went back and looked at my trading on the days that followed a big win…
The pattern was obvious once it was in front of me.
The same few mistakes were KILLING my account. And I had no idea I was making them until I took the time to look.
Addressing these mistakes was an absolute game changer.
Mistake #1: Carrying A Loss Overnight
I’d take a hit late in the day and decide it would come back. I’d wake up to a bigger hit, then spend the whole next day trying to make it back.
Now I cut a big loss the same day it happens. I don’t care how much it is. I start the next morning clean.
Mistake #2: Trading At The Wrong Time Of Day
My winners were coming in the morning, on opening range breakouts in the first few minutes of the session.
My losers were coming in the afternoon. A runner that had already made its move would start to fade, and I’d still be trying to buy it.
The morning is still my favorite time to trade. I’m careful around the open itself, because the first 20 minutes can go anywhere.
Mistake #3. Going Full Size Too Early
After a win I’d go full size on the next breakout before it had proven anything. When it failed, the loss was as big as the position.
Now I size by conviction. If I’m not sure, I take a small starter.
If the trade confirms, I add. If it fails, the loss is small because the position was.
Mistake #4. Trading Off The Screen Instead of The List
On the days after a win I wasn’t trading my watchlist. I was trading whatever was green. I still build a list every week and update it every day. I add whatever’s hot and delete the names that have lost their volume.
Without the list you end up taking random trades. Random trades lose money. None of this came from a book. It came from reading my own log and being honest about what was in it.
When a trader in one of my webinars asks me if his strategy is any good, my first question is what his data says. If he doesn’t have any, neither of us can answer.
If you keep giving back what you made, don’t go looking for a new setup. Go back through your last 10 losses and find the one thing they have in common.
It’s usually just one.
Don’t forget to sign up for Trade Signals.
Stay sharp,
Jack Kellogg
*Past performance does not indicate future results
