Didn't cut losses as planned and now paying dearly
ESLR
I placed some limit sell on ESLR last Friday at $6, and then lowered to $5.7. I lowered it again to $5.6 in the morning and actually thought of executing a market sell when it was around $5.55. In that hour or so, I pondered should I exit my ESLR to limit my exposure to market volatility. At the time, ESLR was my weakest position, and my 2nd most money losing holding.
My intraday signals were showing weakness, but my daily was undecided. Just before lunch, I decided to keep my shares (and cancelled my exit working order) because I want to hold this for the long term (at least weeks).
In retrospect, I really should trust my signals. I knew the market could dive in the short term as we haven’t reached capitulation and widespread fear yet. I have let my emotion got the better of me by not wanting to miss the bottom. In hindsight, the phrase “it’s better to be safe than sorry” couldn’t have been more appropriate.
ESLR closed at $3.47 yesterday, way below my initial stop loss target of $5.6. The time to cut losses short is long gone. It’s either surrender now or wait for the calming of the market.
I decided to wait through the storm in this round. I still think we are very near the bottom. Hmm… haven’t I said that before already when ESLR was at $6.0+ … ?
DJIA
Seriously, I will wait a few days until making an order. There’s too much emotion in the market at the moment. (i.e. WSJ: Central Banks Cut Rates World-Wide in Emergency Move)
Related posts:
3 Comments
Trackbacks/Pingbacks
- Move from Certainty to Curiosity to improve your trading | Quantisan.com - [...] recent example is entering the market just before the October crash and held on to the shares even when ...
- 4 errors and lessons from being long just before the October 2008 crash | Quantisan.com - [...] that, I should at least reduce my position size by exiting some of my most weak positions (i.e. least ...
- Reducing overall market exposure according to market volatility | Quantisan.com - [...] day trading and futures markets, I am not one to play with fire. For my longer term plays, I ...
I’m right there with you!
Hi Pau,
I’m not sure how much experience you have trading, but the best piece of advice I every recieved about stops is this:
When you set a stop, you set it for a reason, while in a rational state of mind. If you’re setting your stops properly, there is never a reason to adjust it, except in the case of a trailing stop to protect profits.
As a side note, if you have the ability, now is a great time to write options
Volatility is high = write options.
Thanks for the advice, Steve. I have read about shorting puts too. But with my puny account size right now, I can’t take the risk with the leverage.