Sometimes a market just isn't the right one for you

Back in October Dennis Gartman was "the most bullish I've ever been on crude". At the time it was trading around $50 in WTI, after which we had the big move south

Zerohedge pick up on the fact that oil hasn't been Gartman's best friend of late, and yesterday he was taken out of a short after musing last week that "oil can only go lower from here". He shorted WTI at 41.85 and Brent at 44.23, with stops at 42.10 and 45.11 respectively but was taken out by the Saudi headlines yesterday

Not two of his best calls

It's easy to point a finger and say that he got two calls spectacularly wrong, but that's trading. Even the best strategies can be blown up from any direction. If it wasn't for the market making a meal out of the Saudi comments yesterday the trade might still have been good. Then again, today's events would have blown his stops

The one thing I do want to highlight is his execution of the trade. While some people might take pleasure from a "big trader" losing, I'd rather look and see what I can learn from it, and this part is key

"On Friday Nov. 20th we sold a half unit each of nearby January WTI trading at or near to $41.85 and nearby Brent trading at or very near to $44.23, giving us an average of $43.04. Our stated risk, was 2% on the position, so the stops were set at $42.10 and $45.11 respectively, and we used our "hour or so" methodology; that is, we'd want to see crude trade through those levels "for an hour or so" before activating the stops in question. Those stops have been activated. The Saudis caught us off. We are gone... now!"

Whether the trade was good or not he's got to be applauded for the disciplined execution of it. I even like the way he approaches his stops. Giving a time window for stops opens you up for bigger losses but it could also stop that enraged feeling from when you get stopped out at a level, only to then see the trade turn back in your favour 5 minutes later. It may not suit everyone but it's something to think about, depending on the trade in question, say in a slow market. Something like that would have worked in EURUSD when it went through 1.0600 yesterday

The other point is that sometimes, for all the best intentions, you just plain get it wrong and find a market that just doesn't like you. We've all been there. What is important is that being disciplined in any trade means that if it does all go wrong, the damage to your trading account is limited and you live to fight another day

Getting it wrong isn't bad, if you get your discipline right