Inexperienced Trader Question
- Thread starter Trader5287
- Start date
Just think if this turns out to be true....and then remember the RMBS push to almost $1,000 a friggin share!!!!!! No matter how many examples I see, I still become utterly amazed at what we have seen in the last two years. Absolutely unbelievable. As my trading buddy said "We lived thru one of the biggest bubbles ever.....and we're not even rich"
Sorry off topic.....bottom line is that anything other than closing the position is averaging down in some capacity....so you really just have to decide if you want to gamble further with this trade gone bad...caues that's what averaging down is and we've all done it.
I believe in the positions I've taken but the market is rallying against me....
I dont mean to be sarcastic but at what level of loss are you not going to believe in your positions. I mean you are short 2 stocks and the dow is up 250 points, so you must have really strong reasons for holding these shorts on a big up day. Trying to hedge these positions may leave you even deeper in the red.
I have made mistakes like this and still do, its hard to take that loss and holding is a 50-50 chance at best. Sometimes if I am brave or crazy I will take half the loss and hold a few shares to see if I can score a moral victory at breakeven.
Since you are new I would say that you should either reduce your size or pick more manageable stocks or decide when that rallying market is going to make you wrong.
good luck with them
I dont mean to be sarcastic but at what level of loss are you not going to believe in your positions. I mean you are short 2 stocks and the dow is up 250 points, so you must have really strong reasons for holding these shorts on a big up day. Trying to hedge these positions may leave you even deeper in the red.
I have made mistakes like this and still do, its hard to take that loss and holding is a 50-50 chance at best. Sometimes if I am brave or crazy I will take half the loss and hold a few shares to see if I can score a moral victory at breakeven.
Since you are new I would say that you should either reduce your size or pick more manageable stocks or decide when that rallying market is going to make you wrong.
good luck with them
they won't let 'unseasoned' trader open a short account, it typically require trader having 3+ years of experience. I'd been down to the same road many time so here is the 'plan'. btw, I think monday will down hard so you might be a winner yet. Ok, the plan in case thing don't work out; 1) reduce your pain in half, it's difficult to think if you are in pain, cover half of your position then 2) sell 2 out-of-money put on OVER and 5 out-of-money put on RMBS.
Geo, ill be blunt.. what you fail to recognize is that right now, this very second the loss is more manageable than it will be if you try to use some fancy option recovery strategy.. take the loss.. losing is part of this game.. if you cant lose well, you will lose everything.. stop acting like you are right - "its only a matter of time and market will prove to me that i am right".. cover your positions and find something better.. and next time, before you place a trade set a stop and keep it..
by the way.. "Solid Research" is such an oxymoron in trading..
-qwik
Geesh, what a great pile of thoughtful responses. I've printed them out and read them several times.
So what I'm going to do is look over the premarket
situation and then start covering during then or during the day to fess up and take the loss. Perhaps the markets will tank thereafter, but as all of you point out, the trade was wrong at the outset and should have been dealt with then.
I had a stop on the RMBS at 7.60 which I thought would be around a 300$ loss. I did not have a plan for the OVER and that I see was a big mistake.
A lot of good lessons came out of this and out of your responses.
Thanks for taking the time to help all.
Geo.
So what I'm going to do is look over the premarket
situation and then start covering during then or during the day to fess up and take the loss. Perhaps the markets will tank thereafter, but as all of you point out, the trade was wrong at the outset and should have been dealt with then.
I had a stop on the RMBS at 7.60 which I thought would be around a 300$ loss. I did not have a plan for the OVER and that I see was a big mistake.
A lot of good lessons came out of this and out of your responses.
Thanks for taking the time to help all.
Geo.