Last week, in the post called Lost capital, I wrote how I committed self-sabotage by not following my own trading plan, in the process lost some capital. However, the promise to myself, to never again trade using a different trading plan other than my own was hastily abandoned after only a couple of days.
I had been analyzing last week's trading experiment to purchase strong trendning stocks and came to the conclusion that it could have worked if I had properly diversified my positions. I committed all my capital to this new more perfected experimental trading plan. However, after only a couple of days, despite being more diversifed, I was hemorraging capital and I liquidated the whole experiment. Dissuaded and doubting the sustainability of trading, I did yet another mistake. Instead of following my trading plan as I had promised myself last week, I invested in a portfolio of dividend stocks.
The next day, I listened to an interview with @Kavastu on the Feminvest podcast, episode 30(swedish). Where he told his history as a trader in the capital markets and the importance of using your own trading plan and trading method. I am now back on track again after losing a total of 4.27% over the span of 2 weeks.
Turning a small trading mistake into a great catastrophe.