Yesterday I wrote about sticking to my (trading) rules vs. taking a risk. The universe has a twisted sense of humor and right now it's getting a chuckle from anyone who held their shorts today! (yes, I'm one of them!)
Right, wrong, or indifferent... today I chose "risk" over "rules". I've been playing it safe the past couple of weeks, trying to break though my $8k resistance mark, with no luck. Today I actually did break that resistance by a couple hundred dollars and had the chance to get out, but I didn't.
I phoned my mother after the market close to let her know how my trading went... let's just say she wasn't impressed with how I played. She actually sounded disappointed with me after hearing about my decisions to hold in that type of circumstance.
Some, not all, of my trading has been very immature; comes with the territory of being inexperienced though. I say this because after three months, I know what to do when this kind of action takes place. However I played the stubborn card, which could ultimately kill my small account... and I was up 65% in 3 months too! Dumb, dumb, dumb.
NOTE: I can say this with 100% certainty there is no reason a person (me in this case) can't make $500-$1,000 a day trading stocks. You have to be disciplined (RE: doing your DD and while trading), you have to be patient, you have to have the capital to absorb losses, it's gonna happen, and you have to have the freedom to enter and exit plays without any restrictions.
My mother also said that I'm more hooked on the rush of trading then I am on actually hitting my goals. Her words caught me completely off guard... but her point was well taken! Clearly greed, ego, and stubbornness kept me in my negative position today (I have to give myself a some credit, I did leave for about 20 minutes (that's how quick this can happen) for lunch.
But rather then listen to my rules, I broke them to take a risk and now the fate of my little account is in the hands of the market. (Not a very safe place considering how volatile it is right now.)
Am I really that convinced HSNI will drop to the low $5's? Absolutely, positively, YES! It will probably go lower over the next couple of days too! Could I be wrong, sure. But I'm a risk taker, so if I'm wrong, I learn from it, I write about it, and I dust myself off from the fall and I move on. Trading isn't for the faint at heart. You have to have balls to be a trader... and you have to willing to lose sometimes. There is no such thing as a perfect trader, everyone loses.
TUITION IS HIGH, SUCK IT UP!
Win or lose tomorrow or the next day... I've made a decision and I don't regret it. There was a better way to play this, but I accept how I played it and am willing to face the consequences of my decision. In my very humble opinion, the market caught everyone off guard this afternoon (longs included).
Am I an adrenaline junkie? I don't think so, but maybe I'm in denial about it. Maybe I am a McGwire type trader, who's got the power of a grizzly bear, but the eye of someone with cataracts. I don't know yet, I'm only 3 months young as a trader. What I do know is that I will live to trade another day...
I will definitely keep my blog up to date with how things play out... good luck shorts. Tomorrow my favorite color is (DOW) red!!!
BottomFeederMillionaire (can someone tell me how to center this??? THANKS!)
4 comments:
Hey noob, I remember you mentioning shorting HSNI in chat the other day, I'm just curious what your thoughts were on why you shorted when you did.
I tried shorting HSNI today but jumped out real quick and took a small loss.
I'm learning not to bother shorting the stocks that follow the market too closely. It's so much harder to predict what they'll do. HSNI was following the Dow almost to a T. I'd rather stick with stocks that follow the Dow less than 60% of the time; I'm using RamtaJogi's correlation calculator now to get an idea of how closely a stock follows the market.
I went back and looked and found that many of my profitable shorts were with stocks that didn't closely follow the overall market.
J,
Awesome comment. Thanks very much for the insight. I have downloaded RamtaJogi's correlation calculator, but haven't actually used it in real life... probably because i don't know how to use it...
Anyhow, will keep that in mind... SOOO much to learn!!!
It's pretty simple to use. When you load it up, it's already got the Dow (^DJI) in there. In the second cell, you just put in the ticker that you want to compare to. You can also alter the dates if you want.
It will then calculate the % of the time that the stock went green when the Dow went green. It will also calculate the % of the time that the stock went red when the Dow went red. I'm looking for the green/green relationship to be less than 60%.
Post a Comment