CNR, the costly mistakes and lessons learned
After picking up my 3,600 shares I was feeling pretty confident in my decision. Over 500,000 shares of support was at $.84 and I got in at $.85 and $.86. The first big mistake I made was deciding to go eat breakfast, bad choice. I came back about a half hour later to find out about 800,000 shares had traded in another short term downswing and not only had the support fallen, but the price had fallen as well. When daytrading you will learn some important tricks that will help you become successful; your time is one of them. Regardless of how confident you are in a stock you should always have yourself covered. I did not put a stop loss on my shares and to be honest it didn't even cross my mind until right now while writing this post; Bad decision. The stock was then at about $.81, $.82 and I had to react. My reaction? I decided to let it play out since its intra-day low was $.81 and I figured that $.81 would be it's final bottom.
I left again to come back to my computer freezing and my internet running slow, not cool at all. After finally re-installing my graphics card drivers and getting up and running I found out that $.81 was not gonna be the bottom point on the day. Another very important lesson that I had forgotten, NEVER ASSUME ANYTHING. In the market, ANYTHING CAN HAPPEN (EOM). Once you loose grip on a stock you are daytrading that you do not have insurance on it is very easy to get emotions involved. Remember to always stay disciplined; this is where I finally decided to let go. I decided it would be best to just take the hit and walk away with a few lessons to relay. I no longer had any foregoing perception on the company and my battle plan had been put to shame. I sold out my 3,600 shares at $.78 for about a $280 loss (w/o including transaction fees).
There are a few different ways you can look at something like this. You can either think that I did not have ENOUGH patience with it and should have held on longer thinking it could have gone up or that I actually made the right move to get out. In the end, my main downfall was my insurance; I was not covered. Looking back now at this trade I should have put a stop loss in at $.83. This would mean that if the stock traded at that price at any time I would automatically get sold out, minimizing my loss. Why $.83? Well, when I got in my "call" was that the stock had bottomed out and would go up on an upswing. The support was the 500,000+ shares at the Bid of $.84. By me putting a stop loss at $.83 I am basically saying in my mind, "Hey, if this stock can't support itself at $.84, I can't bank on any support further down the rabbit hole".
With that being said I hope anyone reading this takes some good lessons out of it and always has insurance on their trades. Personally, this goes horribly against what I have always done, but when day trading and in these market conditions especially, you HAVE to minize your losses. Right now I am 1 and 1. I got one win and one loss on my 10k portfolio record, and since I didn't minimize my loss, I am now in the hole. A few lessons re-visited but I am back on my feet. It is time to go back to work and find the next play.
To the future,
I left again to come back to my computer freezing and my internet running slow, not cool at all. After finally re-installing my graphics card drivers and getting up and running I found out that $.81 was not gonna be the bottom point on the day. Another very important lesson that I had forgotten, NEVER ASSUME ANYTHING. In the market, ANYTHING CAN HAPPEN (EOM). Once you loose grip on a stock you are daytrading that you do not have insurance on it is very easy to get emotions involved. Remember to always stay disciplined; this is where I finally decided to let go. I decided it would be best to just take the hit and walk away with a few lessons to relay. I no longer had any foregoing perception on the company and my battle plan had been put to shame. I sold out my 3,600 shares at $.78 for about a $280 loss (w/o including transaction fees).
There are a few different ways you can look at something like this. You can either think that I did not have ENOUGH patience with it and should have held on longer thinking it could have gone up or that I actually made the right move to get out. In the end, my main downfall was my insurance; I was not covered. Looking back now at this trade I should have put a stop loss in at $.83. This would mean that if the stock traded at that price at any time I would automatically get sold out, minimizing my loss. Why $.83? Well, when I got in my "call" was that the stock had bottomed out and would go up on an upswing. The support was the 500,000+ shares at the Bid of $.84. By me putting a stop loss at $.83 I am basically saying in my mind, "Hey, if this stock can't support itself at $.84, I can't bank on any support further down the rabbit hole".
With that being said I hope anyone reading this takes some good lessons out of it and always has insurance on their trades. Personally, this goes horribly against what I have always done, but when day trading and in these market conditions especially, you HAVE to minize your losses. Right now I am 1 and 1. I got one win and one loss on my 10k portfolio record, and since I didn't minimize my loss, I am now in the hole. A few lessons re-visited but I am back on my feet. It is time to go back to work and find the next play.
To the future,
posted by Blain Reinkensmeyer at
2:34 PM
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