Fear/greed rears it's ugly head

A

aura0663

Here is a perfect example of fear and greed in the market. I have been watching CLHB since the end of April for an opportunity to get in, but missed my entry on May 9 (vacation). So today about 2:45, an alert throws CLHB up , and I just start watching panic selling setting in big time--stock opened at 15.27, was kinda weak, and then BOOM from 13.84 to close at 10.16 on 2 mil+ shares. People were feeling big time FEAR. Being the wise, conservative, inquisitive one, --I'm looking for some kind of news (it's 7:30 and I still have'nt found any news) . Greed starts to simmer in my bottom feeding veins as CLHB appears to find support at 10 ish, right after the market closed. Then this voice in my head screams "Do it", so I bought a small lot of this diving knife. Here is where Greed starts to overwhelm me-about an hour later I come back and see prints of 10.60/10.70. This gets me thinking of taking a quick profit of .59 when I see an Island bid of 10.69 X 500--BUT NOOO--the voice of Greed says to me. This sense of Greed was as intense as feeling of Fear that caused the panic selling. So now I am confronted with two options tomorrow morning when the market determines my fate----
1) I will look like a stealthy, nimble trader that I am trying to educate myself to be, or......
2) I will look like a bottom feeding, misguided fool-capable of not much more than being a rodeo clown
 
"stock opened at 15.27, was kinda weak, and then BOOM from 13.84 to close at 10.16 on 2 mil+ shares"

I'll go out on a limb here and take a wild guess there's news to read on this somewhere. $15.27 to 10.16 in one day isn't following a market trend. Now despite my being pissed off that I somehow missed the chance to short this one today :D

Advice time has past since you are already a stockholder now.
Not much point in losig sleep over it.
If the position was big enough to make you sweat then you took too big of a position.
 
Can't find news either. Quite a chart. Made new all-time high yesterday. Stock was VERY overbought. IMO may trade into a $9.00 handle and be a solid buy. Mini break in mid Apr. shows that a thin stock like this can crack wide open on profit taking. I'll be watching for news after the fact to-morrow.
 
Took a point and was happy this morning. If I had taken a large position, I would have been a lot more nervous. Was the difference between what I could have picked off an Island bid last nite for .59, and the point I ended up with worth it---tough call
 
Emotions are of course totally unnecessary in trading, they make it difficult to make logical decisions. I HATE having to decide on a trade. I make rules to trade by so I don't have to make a decision in the heat of the moment. Technical indicators can help here. Personally I like using the crossing of two moving averages.
The fact that you had been looking at this stock for a while means you were emotionally invested. It's human nature. Just because we spend time looking at or checking the funny-mentals of a stock does not make that stock any better than the next. But we endow that stock with more importance. Usually we give it more slack. I learned the hard way about emotional involvement. That's what got me into a mechanical intra-daytrading method. The stocks are just letters to me now and I like it that way.
Ask yourself what would Spock do. Or Data, without the emotion chip. (I'm NOT a "Trekkie".... really I'm not! :))
I know you know this stuff already which is why you brought it up. But if I can help even one person avoid the pain that I received from emotional trading I'd be glad.
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"If one does not know to which port one is sailing, no wind is favorable."
-Seneca
 
Originally posted by aura0663
1) I will look like a stealthy, nimble trader that I am trying to educate myself to be, or......
2) I will look like a bottom feeding, misguided fool-capable of not much more than being a rodeo clown
More...

Nothing wrong with bottom feeding...no one cares how you make the money, as long as you make it. Hey, at least you're not counting waves like a REAL rodeo clown :D

It sounds to me like you need to learn how to scale in and out of positions. What I would've done is this - hit that ISLD bid and get out of some of your position - take as much off the table as you need to feel good and scale out the rest when it suits you.
 
aura,

Glad that it worked out in the end. But I'm curious, why didn't you have a game plan going into this trade? If you enter any trade with a plan (how you will react to different outcomes) then you are basically set. No worries, just execute your plan.
 
This is a play off the emotions of the market where a greatly oversold condition has been created by the panic selling. The thinking being that people will get over their paniced fear and if there is any buying at all in the morning, at this support level, some people will get in and some people will start covering shorts to avoid the squeeze. This play works best with a slight gap up which creates a buying condition with a cheap entry for people trying to get in and the panic squeeze buying. Although it is probably safer to wait till the next day for entry and see how it plays at the open (thereby avoiding a continued dive), it just "felt" like a perfect example of this setup developing, which is why I bought in that nite. I only got a few hundred shares because of the high risk--if I had thousands, I most definately would have been scaling out a little with the Island bid that nite. My target for this play was a 50% retracement from where it fell off 13.84 (13.84-10.16/2= 1.84). At worst, providing that I didn't get a gap down, my stop was the low of the day 10.05 ish. My reward in this play, wasn't that I payed for my Memorial Day festivities, but that I read the emotions involved in this play, even though I didn't get the multiple point return that would have optimized this setup.
 
Let me tell you it takes a certain amount of dexterity and skill not to mention being EXTREMLY nimble as you avoid one TON of pissed off long-horn bull looking to mount your testicles on his rack......I don't think being a rodeo clown is all that bad.....just my .02 cents.

good trading all,

mrktwiz
 
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