This was a hard-fought week for me in trading. I made some mistakes early on in the week which really cost me. Fortunately, with some luck and I *hope* some skill, I managed to recover and make some pretty solid profits by the end of the week. Like the previous week, I exited all my positions before close on Friday. This wasn’t deliberate – it just worked out this way.

I went bearish this week, but I anticipated a bounce. Monday afternoon, thinking that the upswing “pullback” was nearly complete, I set a limit order on some puts at less than current price, thinking they’d get picked up on volatility (or not). This happened, but the upswing kept happening through Tuesday. I exited many of the positions Tuesday at a substantial loss.

Wednesday at close-of-day, I re-entered some of the same positions, seeing the upswing was *probably* now complete. I was right.

The drive down in prices allowed me to make up all my losses from earlier in the week plus a bit more besides. I set trailing stops on all of my positions, which fired on Friday’s bounce.

So – after recording my trades, here’s what I learned:

#1 – I over-positioned myself on Monday. I’m going for smaller, consistent gains on a weekly basis, and I ended up throwing a lot of capital down on the table at once.

#2 – I also took several positions all at once, making the bet on the movement AND the timing of the market all at once. So when I was wrong, ALL of my money was wrong. Which means I took losses across the board (even though I had different positions).

#3 – I scaled back into position properly, I think. I took a position before close on Wednesday, and took another position on Thursday morning as the market was proving me correct.

#4 – I exited via trailing stops. I ended up leaving a lot of money on the table on Friday, as I didn’t get out even *close* to the day’s lows. In fact, a couple of positions (in QQQQ – the ETF following the NASDAQ) I exited with a less than $10 profit after subtracting my commissions. But you know what? It was a profit. It paid for the commission and then some. And if I’d waited, I would have taken a loss. If it reverses again on Monday – well, I’ll get back in on Monday.

#5 – I am happy to be completely out of the market in my main trading account (I have some stock positions in other accounts, but no options). I’m really not sure where next week will take us. We crashed down through DOW 10,000 – an important psychological support point – on Friday, but climbed back up to end the day just a hair above it again. What does this mean? How will the market react? If I were to guess, I’d guess down again – I think the overall sentiment is bearish for now – but I’m not figuring enough of a likelihood of being right to put real money behind it right now. I’m going to wait and see what Monday brings.