My story for the week

K

Kevmeister

Anybody have any daytrading stories for the week. Here's mine.

I have been successfully daytrading for several years. :) Occasionally, I do stupid things and blowout a significant amount of money (at least to me). I've done this twice in the last 2 years. The first time I made $50,000 on some options, only to lose $28,000 the next week. The second time I bet big on JDSU being added to the S & P. Lost $29,000 in 3 days.

You would think I've learned my lesson.

Now for this week's blowout. First, let me state that it has been a tough year to make money (for me). But I steadily made gains. I did no overnight trades (except in my 401k). I was up about $39,000 as of September 9, 2001.

I don't know what happened next but it was very painful. I formed an opinion that I would take some positions when the market reopened. I was not going to short but would buy some of my stocks that I trade and appeared to be undervalued. I always trade from the technical side but all of a sudden, I'm a fundamentalist.

And I'm thinking about holding overnight.

So here I go, buy some AMAT, pick up some QQQ, oh, EMC looks good, bought some, what a minute, don't have any GE, I mean, come on, GE the juggernaut of all time, a must-have for any fundamental portfolio, bought it and last but not least why not pick up some MSFT. So that's it.

Did I have a plan as to what my out was. NO
Did I have any type of plan, anything at all. NO
Did I do any risk/reward analysis to determine trade size. NO
Did I have any idea what the hell I was doing. NO

Did I form an opinion about exactly what the market was gonna do. YES
Did I break just about every rule in my trading book. YES
Am I trading emotionally. YES

Don't ask what the hell was I thinking. I don't know.

So, fast forward a week later. I'm still holding some positions but did liquidate some. Why am i still holding. HOPE. The trader's worst enemy. Down $31,000 for the week.

At least you can say I'm consistent. I now CLEARLY see why people can blow themselves out and lose in this game. But not clearly enough as I'm still holding some of this crap. Don't get me wrong, I'm far off from blowing out my account. But this hurts, sucks whatever.

I seriously am doubting my abilities right now. I mean, I decided to hold positions on the DOW's worst week since the depression. Thinking about giving up the game while I still have some money.

I know I won't give up. I've always come back.

Last year after the JDSU fiasco, came roaring back and made 3 times that loss by the end of the year.

But this loss is more painful than any other loss. I should have known better.

I wanted to share this story to let others know that if you let your guard down, just a little, it can (will) cost you bigtime. Keep those rules posted on your monitors, bathroom mirrors, refrigerators and read them everyday. EVERYDAY.

I really need to just dump my positions and sit on cash, like I always have, until I can clear my head. Because I am in a daze right now.

Thanks for listening, fellow traders. I feel a little better writing this out.

PS I'm still up this year. Until Monday.

Kevin
 
I too have been considering buying several stocks and just waiting it out and I know better too. But I keep reminding myself; "the only thing I take to bed with me is my wife"... "trade 'em don't marry 'em"


Thanks for the honesty, Kevin. Good luck coming back.


~EC
 
Kevmeister,

I really need to just dump my positions and sit on cash, like I always have, until I can clear my head

That's exactly what you must do, asap. Of course the hope will be there, y'know, you market is so oversold, with my luck a huge rally will start the moment I sell, just hold a little bit longer, just a little bit, I know they're gonna turn around any day now...

As an old broker friend of mine used to say, "Sell 'em and set 'em free". And set your mind free in the process.

Good luck.
 
Kevmeister,
Thanks for sharing. I think everybody benefits from confession. Elder talks about AA a lot. It lets people know that they are not alone. It happens to everyone. I usually did something like this after another bad trade. It seems to throw you into a "dont give a damn" mood. I think one of the best rules for a new trader is if you start the day with a losing trade, STOP. However, I have not been able to do this:)
 
Originally posted by Nicodemus
It seems to throw you into a "dont give a damn" mood.
More...

Nicodemus,

You are sooo right. I didn't give a damn for about 3 days.

I was right and the market was wrong.

Actually, during the first 3 days I increased some positions. But as the week wore on and the selling never stopped, I finally started to liquidate some positions. I could have lost alot more.

The big problem was I didn't know when I took these positions what my out was on either end.

It's funny. When you sell a losing position at your stop you don't hold on to this hope. Amazing, this hope has kept me in positions all week long, when all year I never held any overnight positions, much less hold anything more than 2 hours.

It takes 9 months to make it. One week to lose it.

Unless there is the start of a bounce on Monday, I'm out.

Thanks everyone

Kevin
 
Kevmeister: “if you let your guard down, just a little, it can (will) cost you bigtime. Keep those rules posted on your monitors, bathroom mirrors, refrigerators and read them everyday. EVERYDAY.”

Thanks for sharing your story, Kev. You’ve given some really great advice. As others have said, we all benefit from your honesty. Thanks, again.
 
Kevmeister, go read "Disciplined Trader" by Mark Douglas, you are a typical "boom and buster".

And the reason behind this, per Douglas, is the improper self-evaluation, which means deep down inside, you don't believe you deserve to be rich.
 
book. I mean read it if you have a lot of time to kill. The way you
get disciplined is pick up a thing - like running or a sport and keep
at it. It must be different from trading and making/losing money.
This can help. There are some other ways to work on self discipline - like ask yourself some serious questions in regards to why this has happened ? The questions can be positive and I
don't imply you should beat yourself up (I see you do that a little)
just try to find the honest answer.

The only thing you have control over is your own thoughts.
 
Kevmeister
Oh man. That hurts just hearing about it. If I was you I'd bail. The stock is worth exactly what it is worth NOW. It isn't worth what you paid for it. Until you have enough information to make an educated guess about where the stocks are going I think you'd be better off cutting your losses. If next week it looks like they're going back up, get back in. I lost $14,000 dollars last year by doing the same thing your doing. I kept "hoping" my stocks would go back up and I wouldn't lose any money, They never did. I lost $200, then $800, then $2500, then $5000, then $10,000, then $14,000 as they went down. I still have them. There's some kind of psychological principle in action here. I think it's pretty common. Something to do with hope, like when something is lost and not being able to face it, denial, anger, grief, acceptance. I think part of becoming a good trader is to be able to eliminate the first three and get straight to the acceptance. After all, it's only money.

Live and learn.:p Rigel
 
For your trading I am sure you have a plan, entry criteria that you use for your trade decisions. When you enter a trade do you quickly review that the trade fits with your rules? Is it high probability or low, is there decent risk or too much? These are the things you must look at unless your general trading style has no rules at all.

Diciplined Trader has one anology that really stuck with me. Look at the market as a really fast river that can change directions at any time or not at all. Do you really want to try to swim against the current? ( you can learn something from this book)

Some may say a drop is a drop but in 20 years I have not seen the market face what it is seeing now. This was a totally bizzare event and there is no way of knowing what will go on for the next few weeks.

I have also been VERY tempted to do the same and scoop up some dis or ge , but I review my trade rules, and I dont do it. Guess thats the dicipline part.
 
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