I did it again. I made a stupid mistake on an order entry yesterday afternoon and sure enough it cost me money.
It was a very small trade and the loss wasn’t one that did any harm to my account, but I’m still extremely annoyed with myself for letting that happen. I had intended on putting in a buy order above the market to get in on a trend continuation higher if it were to happen (using a short-term break-out as my signal). Instead I placed a market order and was quite surprised when I saw that a trade had gone through. Doh!
It was dumb. I just didn’t switch the order over to a limit buy from a market order. Lack of attention to detail, plain and simple. The market never did make the move higher that would have triggered my order had I put it in correctly. Instead, it dropped and hit my stop. Fortunately, I’d included the stop with my order (which I always do), so the loss was very small. Even still, it shouldn’t have happened.
You would think that someone with my almost 20 years of experience wouldn’t make mistakes like that. I certainly preach to new traders the importance of not making simple mistakes that could be avoided with a bit of attention to detail. It’s not like I do it very often myself, but even once can be enough to really do some damage.
I did make one really fortunate error a while back. It was in the S&P e-minis. I was long going in to the close of trading on a Friday afternoon. Not wanting to hold the position over the weekend, I put in a market-on-close order to exit. At least that’s what I thought I did. It wasn’t until trading started back up on Monday that I realized I had inadvertently doubled my position! Fortunately, the market went my way and I ended up making a lot of money on the trade. Could have easily gone the other way.
That situation was wonderful, of course, but when I first started in futures trading I had a much less pleasant experience. An order entry mistake I made early then blew up my account!
So the moral of the story is to check your trade before you hit that submit button. It will more than likely save you money.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
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