Lessons learned from a losing trade: NFLD

Quote from ACM Trader:

For me gambling is not taking a position in a stock but rather risking too much on that position. I trade 2 systems. 60% in System 1. In this system, I allocate no more than 10% to an individual stock. So, if I lose 100% in that individual stock, I lose 6% of my total capital. This is the way I trade. When a stock is screened by my criteria, I have to buy it, no exception. This system generates about 600/700 trades per year. I have a lot of pretty winners in many industries, including bio-tech. Because, yes, successful trading requires taking risk. The difference between gambling and trading is essentially risk management.
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Ok, this is not an edge, this is a 'system', BIG difference.
 
A system is a tool made for exploiting an edge in an efficient manner, without a system an edge is useless, since you need the proper methodology to implement your edge. ...
 
Ouch. Sorry to hear of your loss. Biotech really bugs me out, because it does that. I used to play them the most, til I got my fingers burned off. Now I keep my little bloody stumps in slightly less volatile sectors. While I love to gamble, I'm really a very sore loser. :D
 
Quote from rallymode:

If you want to play a news event with options, especially FDA plays, your best bet is using short calendars. Long gamma, short vega. Much better expectancy than anything else you can put on.

You are doing nothing with those collars or protective puts but paying -edge and commissions in addition to the gamble you have already taken by playing the ticker. Anyone who recommends this ahead of FDA announcements should not be listened to.
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Agreed.

Also, in regards to swingtrading, why not have a stop already in place once you entered the position. Especially with the crazy biotechs. I started putting in 10%/key support stops and I am glad I did it cause sometimes Im not around to see what's going on. Saved me some big losses.
 
Quote from volatilitypimp:

False! Those of us who have an EDGE, do not gamble.
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Hey VP... I thought you an momoney had disappeared off the face of ET :) where have you been the past three months? somewhere warm :D
 
Quote from volatilitypimp:

False! Those of us who have an EDGE, do not gamble.
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VP, what if vols go against you before you unload the paper? :) Just teasing.

How's making markets treating you these days? Won't be too pretty come January.

Good to hear from you.
 
Interesting thread, to say the least !
My intention was to share an experience on a trade which turned out as a loss.
I just would like to thank those who gave me some advice and those who thanked me for sharing.
For some others, I just hope that they trade better than they read !
I 'll see you all on another thread.
 
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