Stuck in a Bad Position

[suriNotes 11]

Hi,

 

Some stock earnings reports are always hit or miss. Specially stocks like GE, AA, PFE, MSFT... I do close my positions (Stocks/Options) before earnings and very rarely take the risk of keeping stock thro' earnings. For TS, there are tools (free) to get earnings dates on the TS forums... I posted one called suri.Fundamentals using theGuru's NpEarnings.dll which gets many key Stock fundamentals information along with Earnings Dates/Alerts.

 

One of the simple lesson I learnt from Jeff Cooper writings "Never convert a Short-Term Trade (day trade) to a Long-term investment. Specially a losing one." He goes on to say, "Never take a Losing day-trade position home."

 

Here are my GE analysis calls (daily charts) for the past year...

http://tinyurl.com/37mtej7

 

When trading ABC patterns, my first targets are always few ticks before 100%AB size ONLY. I will re-enter the trade if price retraces from 100%AB level to 62% and bounces back above 100%AB level (to show continuation of strength) and if market also shows continuation of strength to next target levels (127-162% AB). In GE case, now I'll enter a long position above 17.10 (IF) with targets 18.50-18.75 and Stop: 16.70.

 

Regards,

Suri

 

[BlowFish 10]

Chris, despite saying you have learnt your lesson you are still using the term 'stuck'. Don't wait for a margin call and subsequent broker liquidation to prove you are not stuck. As yet you do not appear to have rectified the mistake, maybe this is a by product of you erroneously thinking you are 'stuck'.

 

Imho, there are greater lessons to be learnt like deciding where you will get out of the market before you get in and placing a hard stop there. The doorbell will never be a source of frustration or panic if you have a resting stop in the market.

[Attila 10]

Chris,

 

So now you want to hold till after elections!!?? At the very least don't let it below 15.7. It is currently in a range that could break either way and you really should get out of most/all the position during indecision. You can get back in once the stalemate is resolved. Trade for fundamental and Technical reasons, not events. To carry a positions that apparently means a lot to you into earnings is not smart.

 

Remember while you are in GE there are other opportunities you are wasting. YOU DO NOT HAVE TO GET THE MONEY BACK FROM GE... you are a prisoner only in your mind.

[MightyMouse 12]

I want to thank EVERYONE for their very helpful input ,about my "stuck in a bad position" post here. In general i`d just like to add that, I really didn`t have any so called "plan" that day, when I purchased the 20,000 shares. as a few people had mentioned, but believe me, next time I sure will... , Yes my position was and is short term. I had no intention of holding. What happened that day was, I had already bought and sold 20,000 shares SIX times that day at a profit. Being that for every penny it went up I would make $200 profit, I was riding the crests of the waves all day, and was buying in on dips, and doing very well, about $3650 in profit that day up to that point in time (around 330pm But what happened was that sometime around 330pm, i had just bought in, 20,000 shares at $17.44, and saw it wasn`t really doing much except see-sawing up and down around $17.45 and 17.43.... So I thought maybe I`ll just exit at my cost of $17.44 and call it a day. The door bell rang, and I ran to quickly answer it, when I returned 2 minutes later, the price began dropping $17.45,44,43,42... I thought, let me just hold it overnight and exit in the morning. Well, the next morning due to GE`s negative quarterly earnings report, it plunged to about $16.00. That`s where I became stuck in the position. Otherwise, I probably wouldn`t be. I may add that in the prior two weeks, I had made $13,500 in profits using my short term, quick scalping type strategy. But out of this whole seemingly negative scenario, a lesson or two has been learned. (1) Ignore the doorbell, (2) next time sell even at a loss, at all costs,just to get out, ($200-400-600 loss) in the 330 pm dreaded zone when most day traders mostly dump and exit, so my $3550 profit for the day would have been a little less,but at least i still made money and was home safe. Since Oct 13th I have been holding tight, but lately,I am considering dumping the whole 20,000 shares sometime after the mid term elections, even at a loss, but at least the interest will stop on the margin, which I dipped into, and I will be able to still move forward and profit everyday, once I close my position with GE. Right now this waiting game is like hell, and with my hands tied, each day is a loss. It also seems like every little negative report I hear about every morning, in any economic sector , seems to have its negative repercussion on my bottom line. Thank you all for your help once again, and I wish you all the best of success !

Chris/NJ

 

I don't trade stock anymore, but you are making me want to short GE until you get out.

[catsrevenge 10]

The only reason I say i`m "stuck" is because to sell right now would mean a definite loss. But each day i continue to hold, my losses are not really real money losses,but paper losses only. The only real loss comes If I were to sell at the current price it`s at right now. I came into this field to day trade, make quick profits numerous times per day, buying in at dips/valleys, and selling for quick profits at close to peaks. My game plan is short term only. The reason I feel stuck was due to the set of circumstances which I got caught up in mentioned in my original post, and no way did I ever plan to buy and hold long term, be it GE or any stock. As for buy and hold being dead? It all depends on your over all strategy really. I know people who make a great income yearly with buy and hold long term simply because of the yearly dividends which are made off their stock holdings. And yes, I know that I should use a stop loss trigger every time I buy in. It`s just that i buy in and close my positions so quickly, sometimes within minutes in order to grab the quick profits,that the stop loss trigger function sometimes just seems ludicrous, but none the less would be a great tool of insurance no doubt...

CM/NJ

[MCM 10]

On a clear morning (tomorrow) - print out your last paragraph and have a friend/spouse count the # of rationalizations you crammed into it. That alone should tell you what to do come Monday morning's opening.

 

13K winnings recently (according to your post) and you are fretting over a 3K loss? Seems odd. Either you are a savvy trader who has been hit on the head with a large anvil and forgotten your skillset, or you have been lucky. If it is the latter - sell now , take the 10K as a seed fund - and find a mentor. If it is the former - go to the ER and get evaluated for a concussion.

 

Leverage will kill you - just ask the door on the receiving end of the crowbar.

 

You may escape this trade if you hold it. And it will only re-enforce the behavior which will eventually cause you to blow up in a spectacular fashion.

 

No axe to grind. Just giving you my two cents. Good luck.

[suriNotes 11]

Every trader goes thro' these Cycle of Market Emotions during a trade.

In my view, it is helpful to know these stages while trading.

 

Regards,

Suri

[KalixMOR 10]

This happened to me many times too. Best here is to close down because now it is out of control. The basics in trading is to have everithing under comtrol, so clearly defined targets and stops.

[eurotrader 10]

Since this was suppose to be a day trade with no real plan you either cut & run or... I like SuriNotes AB reply, look to ride it back up to a better exit price. Alternatively you could reevaluate the trade as a longer term trade. If there is reason to hold the trade you could continue to hold and buy an ATM put as insurance.

[MightyMouse 12]

Since this was suppose to be a day trade with no real plan you either cut & run or... I like SuriNotes AB reply, look to ride it back up to a better exit price. Alternatively you could reevaluate the trade as a longer term trade. If there is reason to hold the trade you could continue to hold and buy an ATM put as insurance.

 

It was a day trade (if it was a real trade at all) and it turned into a I-do-not-want-to-admit-that-I-made-a-mistake-trade. 90-95% of all trade plans have provisions for a trade like that.

 

In fact, most trade plans have failure built into them other than the above trade, which for most market participants, makes having a trade plan and not having one indistinguishable from each other in the long run.

 

regards,

 

MM

[catsrevenge 10]

The unrealized gains at the moment, with this position are at around 28K, and NOT 3K as you just mentioned, and with the recent 13K in gains, my net projected loss I believe, would really be 28K minus the 13K in recent gains or a true dollar loss of around 15K ..

cm

[SIUYA 11]

The only reason I say i`m "stuck" is because to sell right now would mean a definite loss. But each day i continue to hold, my losses are not really real money losses,but paper losses only. The only real loss comes If I were to sell at the current price it`s at right now.

CM/NJ

 

No. it is a loss.....period.

you bought something for one price, if you had to sell it today its worth less. No matter how you rationalise it it is a loss.

 

paper losses/paper profits only mean something to the tax man.

 

While this is different as to what you do with the actual position. DONT confuse the issue with poor rationalizations.

[BlowFish 10]

The losses are real you need to deal with them.

 

Sorry for the short sharp nature of the post but it really is not worth debating. The only place you can go with your current mindset is wipeout, if not on this trade on the next or the one after.... Ironically the worse thing that can happen now is if it does come back. This will validate and re enforce this sort of behaviour. Been there, done that, and have the decimated accounts to prove it.

[catsrevenge 10]

Wipeout??? NEVER ! Maybe I failed to mention anywhere here that as a day trader, I am pretty much a beginner ! Yet, I still managed to duplicate my own little strategy on a daily basis and with fairly precise success, as risky as it may seem to some, and still pull out a 13.5 K profit just in my first few weeks. But then, I ran into a brick wall with this last trade, which I said I thought I was "stuck" in. But through the help of many in this forum, I have learned to now perfect, fine tune, tweak and modify my approach, and my MO, and I feel I am now much better prepared to take on my next challenges in this very exciting business. And ultimately, I am NOT "stuck", though it seemed as if I was at some point recently. Thanks to the people in this forum and their comments and opinions, my thinking has been stimulated , and has helped me to think of alternate strategies, towards the recovery from my recent fall.

Even my thinking on losses has been changed..... Losses?.... What are losses? Paper losses? real money losses?

In the end, it`s all just paper with zeros and nothing more really.

I now look to money losses, IF I should ever end up suffering any at all, as nothing more than "Tuition", as an investment used to further my education, and to enhance my better understanding of this industry. There is obviously a learning curve here, and most all education is not learned, but bought and paid for instead. Some people may lose their minds, or jump out of windows over it, but I certainly never will for sure. Some may say I am rationalizing my losses, but I say NOT, for,I have a projected ,modest goal in mind. That within the next five years, I plan on earning around a million dollars, duplicating more or less the same strategy which I have been using, but with a much wiser, careful approach this time around, once I get up and running again, which I will do shortly. And even if it costs me a few thousand, in hard knocks "Tuition money, or "Losses" as some of you may put it?

To me, in the end, I shall welcome having paid my "Tuition",towards my further education,which will ultimately bring me my next Million !

[Tams 20]

just a note for the record,

there is nothing new under the sun,

the market is nothing more than a reflection of human psychology,

yours and mine, and thousands of others, combined.

the market epitomized our greed and fear.

 

your "old" mindset,

and your "enlightened" mindset,

are nothing more than a repeat of history,

it has been done before; you are not unique. There is nothing enlightening about it.

this experience will be repeated again,

and again.

You will hit a brick wall, again,

in which you will have another "enlightening" experience

at a different level,

this will be repeated again,

and again,

until sunset,

or blown account,

whichever comes first.

[catsrevenge 10]

Thanks Tams,

I never claimed to be unique, and I know everything`s already been done millions of times over. If anything, I will continue learning at a cost ,as we all do. And, I`m just glad that I am turning seemingly negative events into positive future benefits. It`s all good. I have been enlightened and will productively move forward, best wishes,

cm

[BlowFish 10]

I guess 'wipeout' is a somewhat relative term. As I said been there, done that, got the tee shirt. In those good old bad old days I tended to stop if I halved an account (I still had some common sense). That was a wipeout to me.Even if the account was 5 times what I originally put in does that mean that it 'was not my money'? It certainly didn't feel like it. Imvho (and sadly in my experience) early success followed by losses is pretty debilitating to the psyche and can mess up subsequent trading.

[catsrevenge 10]

Well, things sure changed quickly for the better. With all that`s been going on the past few days, I was able to selloff half of the 20,000 GE thereby freeing up 100% of my Margin buying power, and was able to somewhat exit my GE position at a much smaller loss than I thought, still holding 10,000 shares of GE for when it likely comes back up or above my previous entry point. At that point my losses will be further reduced. As soon as I freed up all my Margin buying power, I jumped right in on Friday and did a few round trips with Ford (F), 10,000 shares in and out four times netted me about 2K profit for the day, I`m not complaining :cool:

[MadMarketScientist 11]

Nice! Trader justice after all. Once you had a plan and started to execute upon it it seems to have been working itself out!

 

MMS

 

 

Well, things sure changed quickly for the better. With all that`s been going on the past few days, I was able to selloff half of the 20,000 GE thereby freeing up 100% of my Margin buying power, and was able to somewhat exit my GE position at a much smaller loss than I thought, still holding 10,000 shares of GE for when it likely comes back up or above my previous entry point. At that point my losses will be further reduced. As soon as I freed up all my Margin buying power, I jumped right in on Friday and did a few round trips with Ford (F), 10,000 shares in and out four times netted me about 2K profit for the day, I`m not complaining :cool:

[TheBigMan 10]

Don't feel bad. You have a lot of company in that boat. I have and I am sure many others if not all have done it. Cut your losses. The time you have your capitol tied up could be time spent recouping your losses on new trades. Look at the 28K loss as tuition in the school of (What not to do in day trading 101)

When you get sick, you go to the doctor to get an injection. After you take the injection, you then begin to get better. TAKE THE INJECTION.... The full needle 28k worth. You will feel better a week leater when you have made up most of your losses and trading with a more level head.

[kuokam 10]

Well, things sure changed quickly for the better. With all that`s been going on the past few days, I was able to selloff half of the 20,000 GE thereby freeing up 100% of my Margin buying power, and was able to somewhat exit my GE position at a much smaller loss than I thought, still holding 10,000 shares of GE for when it likely comes back up or above my previous entry point. At that point my losses will be further reduced. As soon as I freed up all my Margin buying power, I jumped right in on Friday and did a few round trips with Ford (F), 10,000 shares in and out four times netted me about 2K profit for the day, I`m not complaining :cool:

 

A Pipful new year to you my friend, how are you today? Do you still hold some GE? They went back up This adventure of yours taught me how important it is to check for pending releases re. a share one plans to trade.

[rjrow104 11]

exit plan is imperative.

 

 

 

another note. I have never met a successful trader that risked more than 5% of his account on any one trade, so I am assuming by the fact that you posted on a forum how to handle a $20,000+ position you might have used more than 5% of your account. If not then more power to you. BUT using more than 5% of your account with no exit plan means your money will be parted from you soon.

 

I am not being mean, I've had much of my money parted from me due to bad decision making!

 

just trying to pass on the wisdom,

 

and I agree with the hope comment. the minute you are "hoping" for movements in a market, you don't need to be in it.