Major Selloff Today!!!

Quote from Tums:

I don't understand your point: are you trying to tell us this is how you trade?

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LMAO!! :eek: :D :p

I've done that! LOLOL! But it's been um... 5 years since I did that:P.

2007... my mom trades just like you. She panics when the prices falls, and sells. Then when it's high, she's greedy and won't sell. Then she waits for the fall, and then panics again. Absolutely nothing I say to her changes the way she trades. In theory, she totally agrees with me. In practice, she cannot bring herself to buy a tanking stock, and she cannot bring herself to sell a stock at it's highs (because it's going higher!).

She refuses to deal in options. I hope you're wise enough to at least look into hedging your trades with options. You won't gain as much, but it will give you both the security and courage to trade more til you feel comfortable.

Consider:

I buy a $10 stock because I KNOW it's going UP UP UP. I buy a $1 put option for 2 months to cover that stock (all hypothetical round numbers). I've just wasted 10% on that put! On the other hand, if I didn't think it'd go up 10%, just why would I even bother buying the thing?

So, now I've spent $11 on a $10 stock. The stock goes to $11 in a week. I'm even! I didn't make crap, but I'm even! Then it drops to $9.50. Oh no! Do I need to sell? Nope, because I have a put that just gained $.50, while my stock lost $.50. I'm even. I have spent $11, but I can sell for $11 (minus commissions).

Now the stock goes to $12. I'm feeling nervous... my cost is $11. Do I need to sell? No, because I'm not happy with $.50 and I think it will go higher. Now it goes to $14. YES! I wanna sell! I just made $3, minus commissions, because my total cost was $11. Well, maybe I want to be greedy. The stock goes to $18. OK! That's it! I'm selling! I made $18, minus my $11 cost plus commissions, and I profited $7. What a deal!

But what if the stock goes to $8? So what? My stock's worth $8, my put's worth $2 (because I bought a $10 put). My net loss? Commissions, because my put covered my stock at 100%. If I am tired of waiting, or it took so long to go up that my put's going to expire (I can always buy another put), I can sell... for $11 total minus commissions.

But what if the stock stays at $10? When my $1 put expires... the stock moved $.03! I didn't make crap, and I lost my put money! Yes you did. But a $1 loss for the cost of the insurance is better than the $5 loss if the stock tanked.

Do you get it now? You are too nervous to play open longs and shorts. Been reading your wishywashy about entering for months now.

Cover your bets and you won't mind hanging on as long as you need to, because you have nothing to lose if you do it that way. You spend something for the price of insurance, but if you are confident about the direction, and it's going up, you literally cannot lose if it goes down, but there's 100% upside to go!

Hope that helps:).
 
lmao, it was one freaking trade and u are making a huge fuss about it...u dont even know the guy and how he trades for gawd sake.
Quote from hels02:

LMAO!! :eek: :D :p

I've done that! LOLOL! But it's been um... 5 years since I did that:P.

2007... my mom trades just like you. She panics when the prices falls, and sells. Then when it's high, she's greedy and won't sell. Then she waits for the fall, and then panics again. Absolutely nothing I say to her changes the way she trades. In theory, she totally agrees with me. In practice, she cannot bring herself to buy a tanking stock, and she cannot bring herself to sell a stock at it's highs (because it's going higher!).

She refuses to deal in options. I hope you're wise enough to at least look into hedging your trades with options. You won't gain as much, but it will give you both the security and courage to trade more til you feel comfortable.

Consider:

I buy a $10 stock because I KNOW it's going UP UP UP. I buy a $1 put option for 2 months to cover that stock (all hypothetical round numbers). I've just wasted 10% on that put! On the other hand, if I didn't think it'd go up 10%, just why would I even bother buying the thing?

So, now I've spent $11 on a $10 stock. The stock goes to $11 in a week. I'm even! I didn't make crap, but I'm even! Then it drops to $9.50. Oh no! Do I need to sell? Nope, because I have a put that just gained $.50, while my stock lost $.50. I'm even. I have spent $11, but I can sell for $11 (minus commissions).

Now the stock goes to $12. I'm feeling nervous... my cost is $11. Do I need to sell? No, because I'm not happy with $.50 and I think it will go higher. Now it goes to $14. YES! I wanna sell! I just made $3, minus commissions, because my total cost was $11. Well, maybe I want to be greedy. The stock goes to $18. OK! That's it! I'm selling! I made $18, minus my $11 cost plus commissions, and I profited $7. What a deal!

But what if the stock goes to $8? So what? My stock's worth $8, my put's worth $2 (because I bought a $10 put). My net loss? Commissions, because my put covered my stock at 100%. If I am tired of waiting, or it took so long to go up that my put's going to expire (I can always buy another put), I can sell... for $11 total minus commissions.

But what if the stock stays at $10? When my $1 put expires... the stock moved $.03! I didn't make crap, and I lost my put money! Yes you did. But a $1 loss for the cost of the insurance is better than the $5 loss if the stock tanked.

Do you get it now? You are too nervous to play open longs and shorts. Been reading your wishywashy about entering for months now.

Cover your bets and you won't mind hanging on as long as you need to, because you have nothing to lose if you do it that way. You spend something for the price of insurance, but if you are confident about the direction, and it's going up, you literally cannot lose if it goes down, but there's 100% upside to go!

Hope that helps:).
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Quote from Tums:

I don't understand your point: are you trying to tell us this is how you trade?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1297196">
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LMAO Classic! I think i will put that as my background!
 
Quote from Bitstream:

lmao, it was one freaking trade and u are making a huge fuss about it...u dont even know the guy and how he trades for gawd sake.
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You're right Bitstream, I assumed.

Thought I'd offer some suggestions in case he didn't know. If hedging with options was something he was familiar with, I don't think he would have had to panic when his long started to slide, especially when for weeks he's been so unsure of the market via his postings here. No one that unsure would have entered long that high up without a hedge, unless they didn't know how to.

And judging by some of the posts, there are plenty of people here who don't know.
 
I think the only negative I have about this site is the predictions people make on it. It's just wasted text. The best info revolves around news, product info, and trading strategies.
 
Quote from dougman100:

I think the only negative I have about this site is the predictions people make on it. It's just wasted text. The best info revolves around news, product info, and trading strategies.
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And who's going to think of telling you any of that if no one says something the person has to argue with?

It's people like Blue who MAKE the board what it is. If they all left, I'd leave since there'd be nothing to talk about and no one to talk to.

The best threads on this forum are the predictions... because they are forced to back it up with methodology and then they can be argued and countered with different methodology.

I've not learned a damned thing on this forum except on the threads were someone called a top or bottom. It's not a negative, it's the most interesting thing here.

Anyone wanting to post free info for others can make a living as a financial writer. Not many people would bother posting free info on a forum unless it was in argument or for feedback. No disagreements, no information.
 
Quote from hels02:

And who's going to think of telling you any of that if no one says something the person has to argue with?

It's people like Blue who MAKE the board what it is. If they all left, I'd leave since there'd be nothing to talk about and no one to talk to.

The best threads on this forum are the predictions... because they are forced to back it up with methodology and then they can be argued and countered with different methodology.

I've not learned a damned thing on this forum except on the threads were someone called a top or bottom. It's not a negative, it's the most interesting thing here.

Anyone wanting to post free info for others can make a living as a financial writer. Not many people would bother posting free info on a forum unless it was in argument or for feedback. No disagreements, no information.
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Although I agree with you that a "prediction" can have value for the exchange of ideas and methodologies, I have not seen much of a methodology from BS, except "the market is falling 200 points" or "I told you so, morons." Then we are left with the entertainment value. Not so bad but I have not seen too much of the methodologies used to make the predictions. Maybe I just missed them.
 
OK, I'll agree that you can learn from some predictions if reasoning is behind it. But to say that in one day, there's going to be a 200 pt selloff and not have any reason, c'mon. Tell me that RSI and MACD are diverging (which they are) or you have a buddy who works for a hedge fund and they're selling big today. Or maybe you think an economic number will be bad (which you have no clue, unless inside info). Not just an empty prediction. People that make one day predictions are just trying to be right this once, and look like a genius. Tomorrow someone else is going to make that prediction, and then the next day, another person, etc....... At some point, one of them is going to be right. In my humble opinion, to make a one day prediction is just worthless. But hey, it gave us something to talk about.
 
Quote from dougman100:

OK, I'll agree that you can learn from some predictions if reasoning is behind it. But to say that in one day, there's going to be a 200 pt selloff and not have any reason, c'mon. Tell me that RSI and MACD are diverging (which they are) or you have a buddy who works for a hedge fund and they're selling big today. Or maybe you think an economic number will be bad (which you have no clue, unless inside info). Not just an empty prediction. People that make one day predictions are just trying to be right this once, and look like a genius. Tomorrow someone else is going to make that prediction, and then the next day, another person, etc....... At some point, one of them is going to be right. In my humble opinion, to make a one day prediction is just worthless. But hey, it gave us something to talk about.
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You are probably right that predictions are worthless. We all have our own ways of doing things. For me, when people disagree with my ideas, I am forced to think about them. I may not always argue, but I'm thinking.

When I see bear calls, whether they appear justified or not, I am always forced to rethink my own bullishness. If I feel validated by it, then I go right on doing what I was going to do with better conviction. In other words, it helps me. When I'm bearish, and I see others bullishness, I wonder why. I then go look up my resources and try to validate my own viewpoint.

That's why I get nervous when everyone agrees. I'm not alone in this thinking, the market itself responds this way... when everyone is bullish, the market crashes, when everyone is bearish the market rises.

Even unjustified pointless position calls force us to think. How many pages has this thread run:P? I know that some of you have pounded on Blue with great glee... did it not reaffirm your own bullishness?

When you know that the entire market, both for you and for the 'thing' itself is a giant poker game, your psyche at any given moment is part of the participation. Maybe I'm the only person who reacts that way... but when I saw: "Major Selloff Today!!" I thought... no way... why'd he think that? And I found things to buy I may not otherwise have bought. :D
 
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