Yesterday, I had messed up by doing too big a trade. I was hoping to correct that mistake today.
I was watching ABK closely to get out of it as soon as I can. ABK gaped open nicely and slowly but steadily kept climbing. One thing I did was I sold 300 shares of ABK at 3.80 because I wasn’t sure if ABK will keep the momentum going. Yesterday, I had chance to get out of ABK at around 3.8/3.9 and cut my losses but I didn’t do it. Today, I thought I need to at least cut my losses. Later on, ABK went about 4, hitting high of 4.30. I sold remaining 200$ shares at 4.10.
Overall Stats for ABK:
Bought 500 @ 4.09
Sold 300 @ 3.80
Sold 200 @ 4.10
Loss of 102.50$ (5% loss) after commission. Ouch!
Overall, I think it wasn’t too bad. Yesterday, I was down by 400$ on this holding and I am happy that I could get out with a small loss.
I was also holding SFI (200 @ 2.07$) overnight. SFI was almost stagnant yesterday and I wasn’t really hopeful that will be moving much today. At 9.30, it touched 2.20 and I got out at with total profit of 16.60$ after commission.
Next, Muddy put an alert for BKUNA in chat. I looked at the chart and rushed in to trade (100 @ 1.08). After placing trade, I realized I placed the order ABOVE the even dollar mark. I was angry at myself for blindly following Muddy. So before BKUNA can go down, I got out at 1.09 losing 10$ in commission.
Next, everyone was watching the result of house vote on bailout bill. Based on ABK’s past chart pattern, I thought that ABK will rally if bailout bill goes through. I decided that if bailout bill goes through, I will buy ABK again and hold it over the weekend for potential Monday rally. Bailout bill went through, I bought 250 ABK @ 3.68. Muddy also bought at the exact same time. Though, Muddy got out at 3.90.
It was very intersting that market was moving up in the anticipation of bill passing through the house but as soon as the bill passed, it took a nose-dive. It didn’t make any sense. Interestingly, a person with nick GS predicted the exact same thing in advance. He said, before the bailout market will go up, once it passes, it will go down and it will again rally. Anyway, I am hoping that it will rally on Monday as the details of bailout sinks in and I can make some profit on ABK.
Towards the end of the day, I was again looking for some potential trades to hold over the weekend. I felt strongly that market will rally on Monday and if any stock had taken a beating today, it will move up considerably on Monday.
While I was looking for a play, Muddy posted an alert for LONG CSK at .20. I quickly looked at the chart and saw that stock is falling like a rock since beginning of the year and I was surprised that Muddy decided to go long in it. Though stock was super cheap at 0.20, so I bought 200 shares. As soon as I bought, I read the note on Google Finance that stock is supposed to get de-listed from NYSE. Damn! At first, I thought I will lose my money. Later, I asked the question about de-listing to Laura and she answered that if company gets de-listed from NYSE, it will go to OTCBB and it could move up from 0.20. It was good to know that. Once again, I followed Muddy blindly. The problem with following Muddy blindly is not that he might make a bad trade (from what I have read in chat, he makes some great trades) but he moves so fast that if you can’t keep up pace with him, you will lose money. Anyway, as of now, I am long 200 CSK @ 0.24.
Status as of end of Oct 3rd:
Positions traded for Gain: SFI (16.60$)
Positions traded for Loss: ABK (102.50$), BKUNA (8.50$)
Open Positions: ABK (LONG 250 @ 3.68$), CSK (LONG 200 @ 0.24$)
3 responses so far ↓
1 matty84 // Oct 5, 2008 at 1:27 pm
Hey, I noticed you in the chat the last few days, just wanted to give you a couple suggestions, all in good spirit, just cause I’m afraid you’re going to lose a lot of money!
When there are alerts in the chat, they are just that…alerts. You mentioned Muddy mentioning BKUNA around 1.08. If I remember right he was in at .80 the previous day, so it was just an update. Alerts aren’t at all endorsements to buy. Plus, I know when I give alerts, sometimes (not always) it’s a stock I think is overextended, and I like shorting, so I say XYZ hod. I hope there aren’t newer folks in the chat buying cause I say that, cause 1. I’m learning, too and 2. I’m often short-biased, so when I alert to a hod, it could be for a stock that’s about to fall!! Just know that rarely are anyone’s alerts, including Muddy’s, the right time to buy. They are more than often just bringing something of interest to everyone’s attention, or updating on past alerts, etc. Then the context is analyzed and each person makes a decision based on their trading goals and interests.
Whew! OK, just wanted to type that out after seeing a couple posts where you talk about buying stocks when other people merely mention them as points of interest
2 RJ // Oct 5, 2008 at 1:48 pm
Matty,
Thanks a lot for your input. Yes, I understand that alerts are not enough. You have to do your own due diligence. Currently, being new to this game, I feel compulsion to play each and every trade especially when someone like Muddy with fantastic track record puts up an alert.
Though I feel that it is possible to make good trades based on alerts. E.g. I missed out BKUNA because I wasn’t following chat religiously. Once I follow it and study it on daily basis, I would be able to understand the alerts better and also understand how some other members trade [e.g. you are short biased).
But yes, overall, your point is very well taken and I will be more careful about trading off the alerts. Thank you once again!
3 Learning my lessons, the Hard Way. - RamtaJogi // Oct 13, 2008 at 2:00 am
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