There is a really cool concept that all traders should be aware of.  Here is my latest SOS distress call:

Date: March 18th, Day Before MAR Expiry.

Trader:  “USO on March 1st had a big red candle that told me that this might be a change in trend.  Therefore, I sold short the 39/40, just out-of-the-money Call Credit Vertical Spread.  Obviously it is almost full loss at the moment, since oil has run up from that level and tomorrow is expiration.  So somehow I don't get the right idea about direction. What tools could help me?  


RD:  What was missing in this trade and perhaps all your trades is the simple but vital concept of:

I'M WRONG!

You were proven wrong the very next day and were also given a second chance on March 15th to get out or adjust.  You had a reason to do something.  Fine, but you also need to have an exit strategy in the event that you are right or wrong or you don't have a reason any longer (seems your reason went away on March 2nd or, for sure, on March 3rd).

On the other hand maybe you are a victim of doing the obvious.  In that case, say to yourself, like on March 1st, "USO looks like it is going lower because of candle this, bla bla bla, that.  Normally I would get short but, since I always get it wrong, I will go long."  Use yourself as a market indicator and fade yourself.  I know plenty of successful traders who are very successful in swallowing their pride, quelling their ego, and going the opposite way that the market tells them.