Friday, October 27, 2006
I had a really nasty lost this morning. I let a $500 profit turn into a $409 loss. I had ample time to get out but I fell in love with my position. I believed that the stock would make a bounce and make new highs. I wanted to ride a $1+ move. Even when it broke below my average price I held on to 500 shares. Here is what I was thinking. I was hoping that it would make a bounce. It should because it was so strong earlier. I got out right at the lows. This rule comes into my mind. Never let a winning trade turn into a loser.
After I got hit with the big $587.50 loser I compounded my error by getting into another $230 loser. That trade was an impulse trade which I took because I desparately want to come back from my earlier loss. Like any other impulse trades I bought at the top of a spike and the stock quickly traded back down. I was down close to $600, just 15 minutes after the open. All this could have been avoided if I hadn't pulled my stop.
- I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.