Friday, January 11, 2008

Dumb Tricks with Order Entry

I woke up this morning to find I had a short position in the NASDAQ futures I didn't know about! Unfortunately, the market was up. I closed the position for a $460 loss wiping out most of the profit on my Interactive Brokers account for the week.

How did this happen? I must have left in place a stop order I forgot about without a matched actual position when I went to bed. This is easy to do on the IB platform. My new enthusiasm for stop orders turned around and bit me :) I'm not used to having them in place so didn't pay attention when I logged out of my account. Oh well, I'm still up in trading for the month.

My other dumb trick was going long instead of short earlier in the session. This happens, but it is careless. My real mistake was not immediately reversing the trade. Instead I started justifying why a long would be better. I knew this was a bad thing to do and it was. In the end the market let me get out at a profit once Bernanke started speaking. But I wasted a bunch of time I could have been sleeping up till that point.

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