Trading "Blindly"

I mentioned in my previous post that one of my equities trades was MSA. Well, while it ended up being a nice trade, it was not nearly as nice as it should have been! I entered MSA thinking that at the very LEAST it was going to get to $58. I was a little late on the entry over $57 because I pulled up the stock right as the setup was triggering, but I had an extremely tight stop due to the narrow range it was moving out of. On this type of setup the larger target is a few ticks under the original high, which meant $59, with initial resistance at $58 because it would be the smaller equal move and whole number resistance.

Well, not too long after I was in the setup, all my charts went down. I was completely BLIND! I am a chartist. I read them like I do a book and now someone went and suddenly took away my eyesight and I was a goner. There was this little voice in the back of my head that said, "Don't worry, this is going to work out. Don't change your plan." The naughty voice took over though, saying, "You can't see anything! Ha! Ha! This could be rounding off here at highs and you can't tell!"

So, what did I do? Well, first I took off half my size into the $58, still trying to listen to the reasonable voice telling me that just because I didn't have charts didn't mean the stock was going to perform any differently than normal. When it didn't break through the resistance, however, I went and just said, "Forget it! I have no idea when or if I'm going to get charts back today and I can't just keep sitting here watching time and sales all day!"

Of course, as soon as I hit the sell button, I knew I'd mucked up! The sane voice said, "You dummy! Now look what you did! Just watch!" Sure enough, three minutes later my charts came back online and it was obvious that the correction off the $58 resistance was not going to lead to a reversal and when the stock broke through the $48.40 level the momentum it was gaining had me realizing at that point that it would go through my original target very soon, but I just couldn't bring myself to get back into it after having so many charting problems all day and not knowing if they would fail again or not...

Lesson: Stick to your plan even if you end up blind! It's very hard to not let things which catch you off guard like this faze you, but it's very important to listen to the sane person! Yeah, ok, so this is really easier said that done! I think I need to go back to keeping my notebook in front of me though where I write down my plan when I enter the trade... the target, stop, etc. It helps to keep the sane voice on top when you have something in print in front of you reassuring you that this is the "sane" way to manage your trade!


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