Thursday, June 07, 2007
Bad trading
Still holding RIG. Went back to my bad old trading habits of not respecting my stop losses. I always had the "this is an energy stock, it will bounce up" thought in the back of my mind. That's a no-no.
When it comes to options, you need to be even more disciplined as compared to stocks. In this case, although the stock was down 'only' 2.7%, the option that I was holding went down 10 times that (since my avg cost was 10).
Anyway, I'll be getting out of this if the markets are down tomorrow as well.
Lesson: Respect stop-loss. You can always get back into the trade if it goes higher.
When it comes to options, you need to be even more disciplined as compared to stocks. In this case, although the stock was down 'only' 2.7%, the option that I was holding went down 10 times that (since my avg cost was 10).
Anyway, I'll be getting out of this if the markets are down tomorrow as well.
Lesson: Respect stop-loss. You can always get back into the trade if it goes higher.
