Tuesday, October 09, 2007

 

A few thoughts..

I don't think I've ever felt so bad about a trade as I have about the DRYS positions that I got out of a couple of days ago. It's not that I lost money on it, but because I cut my profits on this big time. Nearly 2.5K worth. Wow, when I put a K in front of it, it looks even bigger. I got shaken out of both my positions a couple of days ago. Sure, you must respect your stop-loss, but I should have gotten out of only 1 position, and kept hold of one. I tried to protect about 250 bucks in profit, but that cost me a lot more. Granted, this stock could have gone down, instead of up, but it doesn't make me feel any better.

On a possibly unrelated note, but mainly because I was so pissed off, I realized that I'm trying to monitor too many stocks. Yesterday, when I was adding some stock alerts in my Ameritrade account, I got a message saying that I couldn't add more as I reached my limit of 80 alerts. 80 alerts ?? What the duce, am I nuts???
I need to concentrate on a few strong stocks, get to know them, know their support, resistance areas and trade accordingly. I've been mainly concentrating on break-outs, but buying on pullbacks could be rewarding as well.
As an example, Madstocks.com (Thanks Ragin') had a post in which he showed some nice charts, and as a quiz, asked people which chart they thought was the best. I posted 'CMI' as my answer. But what did I do with it after that? Not a whole lot, I think I got an alert when it crossed 140 today, but had I studied and monitored the chart properly, I could have made some money on it.



So, a few changes for me going ahead...
1. Choose fundamentally strong, trending stocks. I think I could start from the IBD CANSLIM list. Study the various supports and resistance areas.
2. The watchlist should contain only a handful of stocks. Most traders have a few favorite stocks. I need to find my own favorites.

Trading isn't easy. But if you keep it simple, it should make it a little easier.

If you've made it till here, thanks for listening. Trade sensibly.

Comments:
AJ!

good to hear you vent a little. i think it all comes down to what you want out of a trade, right? i used to buy 3 - 5 month out ATM calls and hold until i gained 100%. great plan when it worked but then the market started gettin volatile and that plan went to shit. i hate holding options too long in this market...a stock can make up a loss with time (hopefully), unlike an option.
now i just buy 1 - 2 month ATM calls and trade within the day or at most the next with an average gain of about 20%. i'm happy with that. i dont get mad about leaving money on the table any more becuase one bad day could sink my ship.

i ended up trading EXM yesterday for about a 20% win. nice.

well good luck and dont get mad about taking profits.

j.M
 
Hi j.M,
Yep, perhaps I shouldn't be thinking too much about leaving money on the table, but I'm sure there's always a lesson in there somewhere which could prevent the likelihood of it happening often.
Anyway, great call on EXM. I still have the 'overbought' mental block, so haven't traded in the last couple of days. Maybe today's action might have released the pressure somewhat.
Trade well.
Aj.
 
looks like you got your sell off today? i've been lucky lately! yesterday i was on the road and noticed SOHU & SNDA up so i sold my options for a profit. last night i was thinking i left some on the table but an afternoon like today makes me realize why i dont like to leave options open too long. i have 1 last name open: AMX. i like the look of the chart but i need the market to cooperate.
i think i'll wait 'til November to buy anything long term...

j.M
 
j.M,
Today's sell off actually caught me by surprise. I would've liked for it to be a little more smooth, it was pretty vicious though.. Now it's got me (and I'm sure other people out there too) thinking whether this is a buyable pullback. Time will tell.
Yes, noticed SOHU yesterday, good going on that.
Good luck with AMX.
 
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