BOUGHT +1 SRS 100 MAY 09 35 PUT @11.00

Following my stop order, SRS pushed on to beyond $24.00 to touch $24.36. I took the opportunity to exit because $24.50 is a major resistance (Figure 1) and at the same time, S&P500 touched 885, which is a major support (Figure 2).

My total loss for this trade is -($6.10 – $11.00) * 100 + $15 commission = $505… For what I thought would be a small play, this amount of loss is totally unacceptable. There are a couple of lessons here:

1. Always put a number to the risk you’re willing to take.
2. Always adhere to stop levels.
3. Never enter a trade “in a rush” like I have done for this entry.
4. Ultrashort ETF’s are mathematically a losing game. Never go long in these again. However, they’ll be great candidates to short.

I’ve formalized my first 3 lessons into my 3 Rules to be followed religiously. And I have also gone back to the drawing board to work on my trading strategy. I must remember how much pain this trade has caused and my determination to improve.

Now, I still have 31 shares of SRS to unload after this…

Ultrashort Real Estate

S&P500 ETF

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