I thought today was probably my worst trading day of the year. It wasn’t about losing thousands of dollars. It was about my performance relative to the setups I had outlined prior to the market open and the ones identified intra-day. The largest error was in my $TSLA trading which I will outline below. I was in two other stocks with fresh news and got on the right side of both stocks but did a miserable job of extracting money from them relative to the moves that they had. For professional traders their results are largely determined by how much money they make on the plays that work. We all know how to cut a losing trade and move on to the next but if we fail to capture the upside in the trades that work at the end of the month we cannot pull much out of the market. The numbers just don’t work.

$TSLA was set up to go lower today unlike the prior two quarters. It failed to impress with its earnings report and that can be a recipe for disaster in a stock that has gone up 300% in six months. I outlined in the SMB AM Meeting what I considered the safest and most likely trading pattern in $TSLA. Based on the after hours action and pre-market trading we thought 160.50 would offer the best entry for a short with stops above 162.

As the market opened TSLA was at 155 and I was tired and anxious. “What if TSLA did not get to my entry price? What if it quickly dropped out another ten points?” As many momentum names have been crushed on the Open recently after reporting earnings these were legitimate questions to be asking myself. And there is nothing wrong in short term trading with calling an audible if the price action warrants a change in plan but in those cases it is very important to be diligent with your stops. When TSLA dropped 155 I got short and covered right away as it began to tick higher. When it traded to 157.50 there was a seller on the offer so I got short again. I got stopped out above 159. By the time TSLA got to my 160.50 entry I was in more of a defensive posture than if I had passed on the two prior shorts. I was also watching MYGN and ANF both of which reported earnings. So I quickly checked in with them and by the time I returned to TSLA I had missed my short entry just below 160.

Normally, I am extremely patient. If a stock does not behave the way I like or it doesn’t trade to prices where I view it as a good long or short I will take a pass. But occasionally there will be a combination of internal/external factors that will cause me to deviate from what I consider to my best trading practices. And when that happens it opens me up to taking out sized losses. Luckily that wasn’t the case today as I recognized that I didn’t feel great so didn’t press and managed to make money in several trades. Both MYGN and ANF shorts I put on in the first 30 minutes traded in my favor but I inexplicably closed both trades out far too soon. Both stocks closed around the LOD.

TSLA trended from 160 to 155 and when it popped back up to 157 I attempted to short it again when I saw the 156.85 offer being held. I went low offer to 156.75 thinking I would be executed immediately as buyers had been aggressively paying the 156.85 offer. Instead my low offer immediately led to the beginning of the next down leg causing the stock to make a new low. I was a bit more than pissed and I’m sure those who listen to my live audio feed lost track of the number of times I was cursing under my breath.

Time to get some sleep and dream of how to execute my TWTR trades tomorrow.

Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 17 years. His email is [email protected].

Steven Spencer is currently long ANF