Matthew_McConaughey__how_I_got_my_head_around__awe_inspiring__Interstellar…that I need to write about it in the hopes of exorcising the bad taste in my mouth.

I didn’t trade the New York Stock Exchange today because I didn’t feel like I could get a wrap on the way the markets opened. This effectively left me with only the Nasdaq to try and decipher and I didn’t really feel comfortable with it either. I’m still a long ways from home but I will be going back this evening after a farewell get together late lunch of sorts. So, here I am trying to trade the cash open and I think to myself “hmmm…doesn’t look like I can fish for anything here, I guess I’ll go on and look at the other assets”. Of course, this is what I do everyday – I scour other contracts for trade opportunities. So here I am looking at other contracts to trade. I didn’t trade in the morning because of the obvious logistical challenges of being away from home but I saw that there weren’t any trades to be had there anyway. I’ve narrowed it down and it looks like I’ll be trading the British Pound futures. So, I’m having a bottle of water and I’m pretty much ready to go while watching CNBC feeling important about myself – this is arguably where things started to go wrong.

But I’ll commence with the official account of the slobfest anyway.

(10:00am) I sit there all Christian Grey-like “yeah, i’m a high powered executive hurr durrr huurr”. then I mentally posit: you know, I didn’t get to take risk yesterday and this morning: why don’t I FLEX my current risk profile and push the envelope a little bit (I can see your eyes rolling to the back of your heads).

(10:03am) after more gulps of water – maybe it was the hotel water – I think to myself “hey brody, since you don’t really have a set plan in the market…why not just do a heads, go long and tails, go short kinda thing” and I’m thinking. “yeah, that sounds statistically safe given that this is a different kind of day with a different kind of setup”

(10:03:45am) “hey, since we’re really letting things go into the twilight zone, why don’t we let Siri on your iPhone flip a digital coin!” At this point, my “intellect” is driving this mental conversation. My fiancée is asking me why I’m not prepping to trade.

“don’t worry babes, daddy got this shizzzz “

So you can see here that I have literally put myself in the perfect statistical storm no different than when George Clooney decided that they should just keep fishing even though there were forces of nature coming that would eventually wipe them out – I’m too tired to link so +1 for you if you get this movie reference.

My resulting trade of the British Pound ended up being such a colossal failure that this is one of the few times where the result and the effort were both equally goatcrap. To put it in perspective, I literally shorted the lowest tick of the period – literally, the lowest tick. You have to TRY and do something like that. The market did nothing but go up from that point; not even a retracement. Not even a “you know what, this guy Rhiese is a total shitwhistle, why don’t we bring the market back so he can exit out at a respectable loss”. There would be none of that. The market literally took me out to a pool full of crocodiles, put the Lady Gaga meat dress on me and pushed me in.

It has been ages since I’ve been stopped out on a trade and I take pride in taking the smallest losses that I can possibly take. There are times when I reach my daily limits but those are on a multitude of trades and different contracts. This one, I just got stopped all with a FLEXED risk profile.

As I’m sitting here at this budget Hilton hotel workdesk, I have the trade sprawled out in front of me for a post-mortem dissection. Yes, it was a collection of critical failures; letting my iPhone decide which way to go and increasing my risk. In increasing my risk and subsequently having it come true, I have intrinsically ruined the value of my taking the day off yesterday because it may have very well been a losing day both in opportunity cost and in PnL terms. On the other hand, I could have theoretically just let my iPhone decided my trades, but had I just stuck to my normal risk profile, I would have lost but I wouldn’t have lost as badly as I did and that is what made the difference in the day. Sure, I’m looking at the market now and in retrospect, I would have seen that the British Pound was being pushed slower than there were trades going off at the bid – maybe…just maybe I would have gone long. However, that all goes into the theoretical, the what-ifs. I may have still decided to go short because I know sometimes those trades going off at the bid are people simply covering shorts and the momentum will come back. So in the end, the main killer of my day was my attitude about risk.

I have a set risk profile that I implement into my company for different types of trades and this profile is meant to keep me afloat during good times and bad. I suppose that if I could have made a sudden change in the risk profile, I could have done it today. There’s no strong correlation of results – both positive and negative – to taking one day out of 365 and making that day the time you decide to max your risk. The only time that you screw yourself doing this is if you do it more than just once a week; let that sink it – more once a week. There are people that adjust their risk exposure on EVERY TRADE with the variable coming from what mood they’re in. You can only imagine what their PnLs look like. Me, this is the first time in almost 8 years I’ve done something that neanderthalic for this business and as you can see, it cost me – both in my wallet and my attitude going into the weekend because you know I hate losses especially on a Friday.

Am I thankful to the man upstairs for this lesson? Yes. Am I crying tears of blood whilst wallowing naked in a pool comprised of self-pity, stale animal crackers and pigeon feces? Also, YES.

But I deserved it: all because I toyed with the idea of risk. I will never do this again.

I’ve sent my “intellect” packing after its short stay – it’ll be many years again before he sets foot in my mind. In times like this, I’m often reminded of the phrase: the things you think you know are the things that can massively harm you.

2 thoughts on “A Failure So Complete…

  1. I’m sitting here in McDonalds drinking an ice vanilla coffee (so much better than Starbucks and cheaper to boot) laughing my ass off. I’m not sure why other peoples pain can be so funny but you know as well as I do that we love to laugh when others try to skateboard down a handrail at the park and smash their gentleman parts to smithereens! That is what your trading day reminds me of. Skateboarding down a handrail. 100% luck is required to come out without permanently damaging your ability to reproduce and 150% luck is required to actually pull the trick off! The likelihood of either happening is practically nil!

    I’d send you an ice bag for your injury if I thought it would reach you in time!

    Thanks for a seriously entertaining read. I needed it after today’s fiasco in the crude market.

    Liked by 1 person

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