Lets talk about spreading yourself too thin. Today I traded RIMM and GS.  I came in with an overnight position in JPM and made a negligible amount of money on that when the market opened. I had a bearish bias on today’s open. If we did not sell off then my plan was to re-evaluate. I thought that based on the negative pre-market reaction to the stellar quarter GS put up and the huge move up yesterday, we could have some selling on the open.

With all of the above being said, I was trading GS as my primary stock. RIMM was my secondary idea. I had a key level, 47.40 that I had used a few times over the last few trading sessions. Now, I am a very aggressive trader on the open because that is when I feel that I have my biggest edge. I saw the failed up move when GS lifted 150 and then the hard selling below 149.25. I rode a small short to the low 148 handle. Mistake number one. I should have gotten flat and then waited for my ideal price to re-short. I held a core when it was not one of my Trades to Hold.

This greedy mistake cost me $400 in the first ten minutes of the open. But, this is a small mistake. My next mistakes were moronic. RIMM squeezed 45 cents above my level and then came back. I traded out of this position with a small gain and then re-established my short to cover below 67. Now I am watching GS to see my next edge. I finally see a little panic selling below 149.50 so again and I hop on the short. No follow through. I moved on and started to short RIMM, I am still using the 40 cent level but now the level is 60 cents. I take a little bit of pain here. I am fine with this but I made a mistake that happens too often. I went after the fast money.

After waiting for my play to unfold in RIMM, I got out to scratch after holding through all of that pain so that I could concentrate on shorting the S out of GS. I then hit 148.50 is GS and covered much higher for a loss that ended my morning. Now I am fuming as I watch RIMM trade lower for a point with out any shake outs and watch GS trade up with straight short covering. How to not repeat this mistake? If I take on 20 cents of risk in RIMM and then get confirmation that RIMM is about to break I have to hold it for my reward. Instead I wanted to get out so that I could not have that position influence my short in GS. The reality of the situation was that RIMM was breaking down and if GS held below 148.50 it could break down. I went with the maybe possibly hopefully play instead of the play I already watched unfold.

The point here is that institutions set the prices of stocks and my positions really do not make a big impact on the price of the stock. I have to find my edge and then play what is actually happening. Lots of times a trader will say well if this happens then this will happen. The reality of the situation is you have to trade what is happening not what could happen. When it does happen you will be able to trade accordingly. If GS was able to trade below 148.50 I would have been able to get short and hold a core, but this did not happen. I just tried to force it to happen. Tomorrow I will trade my plays when they happen. This mistake cost me a lot of money today and shows why you can not lose your discipline for a minute. Or should I say, not even a split second, because it will have a major impact on your month.

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