Warning: Following my trades may be hazardous to your financial health. See Disclaimer.

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.

  1. Order entry errors have no place in trading
  2. After 3 winning trades, call it a day

No comments:

Post a Comment