- Order entry errors have no place in trading
- After 3 winning trades, call it a day
Tuesday, May 08, 2012
Order Entry Errors
It's been months since the time I used to make tons of order entry errors, especially back when I was using Interactive Broker's spreadsheet/hot-key rapid fire combination! With Tradestation, it doesn't happen as much any more. This morning I was happily doing pair-trading shorting CMG and longing PNRA. I had 3 winning pair-trades already, and I warned myself that I should call it a day. From experience, for anything, it's best not to push your luck after you got a break 3 times in a row. I relented, however, since so far the trades seem to be sure-shots. So I entered yet another pair-trade. I let the pair fight agains each other as usual. Suddenly, I noticed that both are in big red. I was baffled by the unusual sight. I quickly looked at my position bar. Darn it. I had both trades "long"!!! I am used to the notion of pressing the blue button to "enter" a trade, and the blue button to "exit" a trade. And I had made the mistake of pressing the blue buttons for both sides of the pair-trade! Of course, per the universal law of jinx, when I make an order entry error, it has to be against me. Why didn't both stocks go up, instead of down?! I quickly closed one leg, and partially close the other since the position were simply too big without hedging. I eventually close the remaining shares after some small bounce. When all was said and done, this order entry error had erased my day's gain. Lessons learned.