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:
- Always put a number to the risk you're willing to take.
- Always adhere to stop levels.
- Never enter a trade "in a rush" like I have done for this entry.
- 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...
[caption id="attachment_1393" align="aligncenter" width="500" caption="Ultrashort Real Estate"][/caption]
[caption id="attachment_1394" align="aligncenter" width="500" caption="S&P500 ETF"][/caption]