My Thursday’s post indicated how I had two winners under my belt. Let me tell you the sad tale of how I converted one winner in to a loser.
First, my o/n short of DIN. Here’s what happened:
DIN Trade 7th Nov
I don’t know why I panicked during the second run. I actually sold at the PEAK of the second run! I sold at 13.75 and immediately after that DIN again went close to 13$. I had 100$+ profit on this trade which I converted in to 30$ profit.
Next, BEE.
BEE Trade 7th Nov
Again, I got shook out. I think the main reason was that I was already not happy that I entered that trade yesterday so attitude was negative towards the trade and I couldn’t take any more losses on the trade.
Finally, my worst trade of the day, PNK.
PNK Trade 7th Nov
There were multiple moments where I could have made tiny profit. First, in the morning sell off, I had time to cover my position for a nice 240$ profit. After the huge run I was lucky to have PNK go back to 5.97, I could have covered there for 104$ profit. Nope, I was greedy and I wasn’t willing to listen to what the price/volume action was telling me. Well, I paid the price. Ultimately, I lost 44$ on this position.
I spent lot of time thinking about these trades. First, after the horrible jobs report, I thought that market will go red and my shorts will keep getting crushed. Numbers were telling me that market was green even after the job report but I did not want to believe that. I only wanted to believe that 240,000 job loss means market has to go down. I was refusing to believe what I was seeing.
Second, I should not stretch Torello’s strategy of multi day short. In fact, on my last post, he commented that one should cover his/her short if it starts approaching yesterday’s close. PNK clearly was moving up to yesterday’s close and I did not cover.
Also, I think I was being very greedy. As JV wrote in comments, 1$/share profit is phenomenal and something which doesn’t happen very often and that I should book my profits bit sooner. Actually when I think back, I am realizing that I did not even have an exit price. As I said in my last post, after my biggest winner my judgement was clouded and I forgot that I need to have a target exit price. As Matty reminded me of JV’s post, using day range as support and resistance is definitely a solid idea.
Anyway, Friday was very stressful but it taught me a lot. I think I have finally understood what all I need to do to solid trading. I will be putting up another post detailing my thoughts.
Till then, happy trading!
RJ.
Status as of end of Nov 7th:
Positions traded for Gain: DIN (30$)
Positions traded for Loss: PNK (44$), BEE (77$)
9 responses so far ↓
1 matty84 // Nov 10, 2008 at 5:14 pm
It’s cool Ramta, sounds like you’re learning a lot, which is good, too. Hope you got to de-stress over the weekend.
2 iL Torello // Nov 10, 2008 at 5:53 pm
Ramta…did you do better today? I just didn’t get up early enough to reserve shares unfortunately!
3 RJ // Nov 10, 2008 at 9:16 pm
RJ,
You got some good observation skills. It’s just that your timing is a little off like me. That tends to be an issue with some traders. Sometimes you get greedy and wait. During other times, you get shaky and worried so you cover a short too early. I really think that it’s important to pay close attention to the market and stay cool when things go awry. Anyways, keep us posted on your potential trades and thoughts in Tim’s general blog. I’m going to do that same thing.
4 bao_t2008 // Nov 10, 2008 at 9:45 pm
That comment above is from me. I made a typo on the name.
5 bao_t2008 // Nov 11, 2008 at 9:32 am
RJ,
What do you think about GM? They could be shorted for a couple days until the FEDs step in. After that, it’s possible to play the bears w/ them. I see a bigger risk shorting this company though. I’m leaning more towards buying into the bull but I don’t want to catch a falling knife.
6 bao_t2008 // Nov 11, 2008 at 9:32 am
*play the bulls
7 RJ // Nov 11, 2008 at 10:27 am
bao,
I don’t think I am going to play GM. I got burned by AIG today and I think that staying away from these high profile stocks is in the best interest of my little account.
Good luck!
8 bao_t2008 // Nov 11, 2008 at 1:18 pm
I jumped in on GERN too early this morning at $4.4/share. I was in for quite a roller coaster. Luckily, it’s down to $4.5/share. It’ll probably go further down to the low $4s or mid-$3 by the end of this week or next week. The stock has lots of down side. My only concern is that it might be an Obama stock which is related to pharmaceuticals.
9 RJ // Nov 11, 2008 at 8:53 pm
Bao, GERN closed at 4.36 so that’s a good news! I hope you didn’t panick and closed out with a loss. Let me know how it went.
RJ
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