Thursday, January 21, 2010

Got to stop the bleeding....

Update: I added a little quote on top of the page. Don't know about you guys but I could use a little inspiration right now!

What a day! Personally speaking, got bitch slapped by the markets. It is said that experience is the worst teacher but I would say the stock markets are. There is no easy way to learn but the hard way. But a little background first.

Again today, I had no access to the markets from the open till 11:30. When I tore myself away from the pre-market, things looked nice and rosy out there....

NEP had news out at morning and was trading around at around 10.20, up ~ 5%. Palladium was steady and SWC was also up. Goldman had reported huge profits, and was looking good pre market. Like I said, all good....All this lulled me into a false sense of complacency and I decided since my stocks were far away from my potential stops, I did not actually need to put my stops in. If you think that was the stupidest move of the year, you got that right.

Came back 11:30. NEP ~ 9.25. SWC ~ 12.90 (In case you wanna know, my stop was 13.60) and DXCM ~ 9.50. I was in 30% cash if that seems to be any consolation.

Frankly speaking, I was disgusted with myself and didn't know what to do. I am fine losing money, but throwing it away....not good. When you dont stick to your stop loss, its like your last area of defense is breached and you dont know what to do. I thought of selling, but it pretty much seemed like closing the barn door after....

NEP closed at 9.43. DXCM at 9.75. SWC at 12.51. I added SWC at 12.70 on a triple positive MACD divergence, a pattern which has often worked for me in the past.

Overall, the selling was brutal. Its not a good sign when Google reports the kind of earnings that it did and still gets crushed after hours. Not good at all. The second level of support that I had pointed out in the post yesterday held for S&P and that is an important number to keep your eye on. I think its not a good time to go short right now as it might be a little too late for that. Maybe after a weak bounce.

As for my positions, I have got to think about it. Should I rip them off like a band aid and just take my losses? Or should I wait for a bounce? I might just go with the former as I hate counting on hope. That has never worked for me. If its any consolation, I am still overall positive for the month in spite of a horrible last week. But way below my close to 10% gains earlier in the month.

Well, there is a lesson to be learnt here and I think it is to always have a stop in place when you are away from the screen. If I can apply this lesson to my trading from now on, I will consider today's losses well worth it.

Hope all you readers had a much better day than me!

This one definitely gets the label mistakes! :)

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