Some trades hurt more than others—not because you lost money, but because you did everything right… and then undid it yourself.
This MNDY earnings trade is a perfect example of that.
On paper, this was an A+ setup. It followed my rules. The signal was clear. The execution was clean. The trade worked exactly as planned. I took profit. I walked away green.
And then I came back and slowly gave it all back.
Not because the market “screwed me.”
Not because the setup failed.
Not because the strategy doesn’t work.
But because I started trading emotionally.
Let’s break it down.
The Setup: Strong Company, Weak Stock
MNDY reported earnings in the morning. They beat expectations but lowered forward guidance.
Fundamentally, this is still a strong company:
- Great margins
- Strong product
- Solid position in its space
But fundamentals don’t matter much in the short term when sentiment turns.
And right now, software stocks have been getting absolutely crushed.
MNDY was no exception.
After earnings, the stock sold off hard. By the close of the first hourly candle, it was down roughly 15% from the previous day’s close.
That’s exactly the type of move my post-earnings momentum strategy is built around.
A large, decisive move.
High volume.
Clear direction.
Strong emotional reaction from the market.
That was my signal.
The Signal: -15% Hourly Close
My rule is simple:
If the first hourly candle after earnings closes at ±10% or more, I look to trade in that direction.
In this case:
- Direction: Down
- Size: ~15%
- Clear bearish momentum
That’s a textbook short setup.
No guessing.
No predicting.
No opinions.
Just data.
The stock was also breaking down on hourly and 4-hourly charts, which to me, signaled a strong short opportunity.
The Entry: Executed Properly
I entered the trade properly.
I shorted 15 shares around $83.50, following my standard structure:
- Profit Target: ~10%
- Stop Loss: ~5%
- Position Size: Controlled
- Risk: Defined
This is how I’m supposed to trade.
And guess what?
It worked.
The stock moved lower.
Momentum continued.
Price dropped through my target.
I took profits as planned and left a small runner.
That runner later got stopped out around 10 a.m.
Final result from the “proper” trade:
➡️ About $100 profit.
Clean.
Disciplined.
Professional.
At that point, the day was a success.
I should have been done.
Where It Went Wrong: Trying to Catch the Bottom
This is where psychology took over.
After I exited, I noticed something interesting:
The 9–10 a.m. hourly candle formed a bullish hammer.
That can sometimes indicate a potential reversal.
So technically, the idea of watching for a bounce wasn’t crazy.
The mistake wasn’t noticing it.
The mistake was acting on it impulsively.
I started thinking:
“Maybe this is the bottom.”
“Maybe it’s about to reverse.”
“I could catch a nice bounce here.”
And that’s one of the most dangerous thoughts in trading.
Trying to “catch the bottom” is how accounts get slowly destroyed.
The Emotional Spiral: Flip-Flopping and Oversizing
Once I started chasing that reversal, everything went downhill.
I went long.
Then short.
Then long again.
I stopped following my system.
Stopped respecting my rules.
Stopped caring about structure.
Worse, I started increasing my position size.
That’s the real killer.
When you’re emotional, you don’t just trade more—you trade bigger.
And that’s exactly what I did.
Each new trade was an attempt to “fix” the last one.
“I’ll make it back on this one.”
“Just one good bounce.”
“This next move will work.”
Classic revenge trading.
Slowly, trade by trade, I gave back my entire initial profit.
Not in one big loss.
Not in a dramatic blowup.
But through a series of small, unnecessary mistakes.
Death by a thousand cuts.
The Worst Part: Getting Mad at Myself
After it was over, I was frustrated.
Not because I lost money.
But because it was completely avoidable.
I had already won.
The market gave me the setup.
I followed my rules.
I executed correctly.
I took profit.
Everything was done.
The only reason I ended flat instead of up was me.
That’s the hardest pill to swallow in trading.
The Core Lesson: Overtrading and Oversizing Are Silent Killers
This trade perfectly demonstrates why overtrading is so dangerous.
When you overtrade:
- You lower your edge
- You increase emotional stress
- You reduce selectivity
- You make sloppy decisions
When you oversize:
- Small mistakes become big losses
- Emotions get amplified
- Discipline disappears
- Fear and greed take over
Combine the two, and even good traders self-sabotage.
That’s what happened here.
Why Rules-Based Trading Always Wins
My rules worked.
My system worked.
My edge worked.
The only thing that failed was my discipline.
When I traded by rules, I made money.
When I traded by feel, I gave it back.
That’s not a coincidence.
Rules-based trading removes:
- Ego
- Guessing
- Hope
- Fear
- Impulse
It forces you to behave like a professional instead of a gambler.
The moment I abandoned my structure, I stopped being a trader and started being a speculator.
What I Should Have Done
Looking back, the correct move was simple:
- Take profit
- Log the trade
- Walk away
- Be done for the day
That’s it.
No “just one more trade.”
No “maybe it’ll bounce.”
No “I can squeeze more out of this.”
Green is green.
Protect it.
How This Trade Will Make Me Better
This wasn’t a bad trade.
It was a great trade followed by bad decisions.
And that’s actually encouraging.
Because it means my edge is real.
I don’t need a new strategy.
I don’t need more indicators.
I don’t need more screen time.
I need better discipline.
I need to respect my own rules.
I need to know when I’m done.
I need to protect profits like they matter—because they do.
Every dollar earned through discipline can be lost through emotion.
This trade proved that.
Final Thoughts: A+ Setup, C- Execution After the Fact
To sum it up:
- Setup: A+
- Signal: Clear
- Entry: Clean
- Management: Good
- Exit: Proper
- Follow-up: Terrible
The market did its job.
My system did its job.
I failed to do mine.
But that’s okay—if I learn from it.
This trade reinforces why:
- Overtrading is dangerous
- Oversizing is deadly
- Chasing reversals is risky
- Emotional trading is expensive
- Discipline is everything
If I can master not messing up good trades, my results will improve dramatically.
Not by trading more.
But by trading less—and better.
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