In spite of it being merely four days long, it was a really good trading week. The one giant blemish was how I bungled my Apple Inc. (AAPL) trade, which was a tremendous success from an analytical perspective, but an utter blunder personally, since I managed to completely avoid the 200%+ gain that ensued a mere three days after my initial post.

I mulled it over for a long time, and I wrote down this short but sweet ruleset:

• An entry is based on a discrete rationale
• An ecit is based on the violation of that rationale or a discrete profit rationale
• There is no place for whimsy

The first rule is one I nailed perfectly. My entry was indeed based on a discrete rationale. More specifically, it was based on my superb analysis. It’s the rest of this compact little guide where I completely muffed it.

My exit wasn’t based on either a violation of that rationale (the price gap was never pierced), or a discrete profit (I took a small loss, not a profit at all, and I certainly hadn’t reached any kind of sensible target). Instead, it was based on what I am gently referring to as “whimsy.”

I’m sure a well-crafted tidbit like what I’ve drafted above won’t save me from screwing up in the future, but maybe it’ll help, and perhaps it’ll even help you, too.

More By This Author: