Lesson with Orders

Just as I have talked about in the past, I always try not to make the same mistake twice. I never let it wear on me too heavily when I do, but I also don’t take pride in it. The only thing that I consider worse for myself, is making mistakes that I already know the answer to, and just making a plain dumb move.

My latest example of a “dumb” move is with the 7500 shares or SIRI that I hold in my investopedia account. I had bought this stock as it was climbing; and I usually will do, decided to put a stop in place the next day so I was guaranteed profits on the trade. The next day, like I had expected, the stock rose around 5%, not a huge jump, but a jump nonetheless. I decided to put the stop in place, and move it up if the stock continued to rise. The next day, it reversed and began to fall back down. I was not worried though, since I was guaranteed profits, right? Wrong.

The mistake that I made was this: I accidentally put in a sell limit, rather than a sell stop. What happened here was that my stock would have had to continue to rise in order to make the sale, it didn’t happen though. The stock fell, and since I unintentionally made the simulator only sell at a higher price than the stock was at, I lost. The moral of the story is very obvious, “Pay Attention.” Had I done this in real life, I would have kicked myself. So I ended up loosing $2,000, rather than making about $1,500. Just a “friendly” reminder.

Good Luck With Everything!
Mark Zimmer