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Now that the market is closed...

Okay so Thursday and Friday I let my emotions get the best of me, and to be honest they drove my trading decisions. I did not like seeing some of my positions trade against me. I also felt like I was missing out on this downmove and felt compelled to have positions on. But the reality is that you don't have to make a trade. I tried to force some trades when I sold those call spreads in GOOG, PCLN, and ISRG. Only to realize that I was not comfortable with the risk vs reward of those positions. I tried to convince myself that I was but risking $3400 to make $540 just did not sit well with me. I felt very anxious. So I did the prudent thing and took them off.

Both the entry and exit of these positions were out of pure panic. After I exited the call spreads I had to get up and go for a walk to clear my head. As each call spread was actually considered 2 positions, it caused me to trade 6 round trip day trades in a 5 day period which led to a margin call for pattern day trading. My first instinct was to fund my account with the additional money to bring me up to the minimum $25k so that I can trade immediately. But after I gathered my thoughts I figured it may be a good idea to just request a PDT reset that can be done once every 180 days. This means that I would not be able to trade for another 5 days until the day trades cleared but I think this would be good. I will have the next few days to reflect and analyze the market with out any pressure to put on new positions. I will also work on defining some risk metrics and finally write out my trading guidelines (For example, max risk per trade).

Things that I will try to internalize. The markets do not go strait up, but either does your account value. You will have periods of draw-downs and this is normal and a part of playing the game. When these draw-downs happen you job as a trader is to minimize losses in the best way you can. It is very easy to get scared away from the market and have self-doubt in periods of draw-downs. I had all kinds of negative thoughts as to why I would never be able to do this for a living and how I needed to change my trading style, but these are just irrational thoughts that happen when you are wrong. After I take a step back and clear my head, I don't believe any of those self-defeating thoughts but it is important to be able to identify these moments and work through them.

Have a great weekend!

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