I haven't posted a trading idea in a while, because to be honest I'm having a difficult time predicting anything lately. My suggestions and postion on the Euro-Dollar relationship were good for quite some time, and I like that sort of trend. As I noted in a post here, that trend ended with a "head and shoulders" chart formation, and there has been no consistent movement since.
Well, the rest of the market has been that way for me lately too. I am fairly risk-adverse these days and the fact that I'll soon be taking an extended scuba vacation has kept me from playing the upcoming earnings season.
That "risk-adversity" has seen me getting chopped up and out of several daytrading positions in recent days. I've taken some small losses on positions that later on the same day would have been good profits, but there was no way to foresee that. CFC is a good example. I had puts on that bankruptcy rumor, and covered quickly after their PR, and trading resumed. I'm not going to lose sleep over the few dollars lost in that trade, but looking at where the stock ended yesterday, I can't help but get frustrated.
I've also played IWM recently, but the wild swings there have hit my stops before I would take profits, profits I could have taken just a couple of hours later. And today I stopped out of a few MDC puts, and I top-ticked that one. Ten minutes of patience would have saved me quite a bit of money. Frankly, these markets seem to know exactly what my pain tolerance is.
I've been getting chopped up, so I'm getting out for a while, and going on vacation. I'll be back in February, when hopefully the markets will be a little more sane, and a little more predictable.
Wednesday, January 09, 2008
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3 comments:
...when hopefully the markets will be a little more sane, and a little more predictable.
I wouldn't count on that.
Capital preservation is top of my list for this year, so your decision to take a timeout would be a good idea even if you weren't going on vacation. As for frustration I'd rather have the kind that comes from not being able to find or decide on new positions rather than the kind that comes from being on the losing end of a trade, or worse a string of them. Not that the former, which is where I am right now, isn't bad enough.
I will still take small losses, before large losses, but I hate getting the whipsaw treatment.
I'll be around for the Op/Ex, looking for a small hail-mary play.
Then I'm going diving!
I hear yah indi, while the volatility is good for traders its so hard to predict. One thing I have learned the hard way is that the market rewards irresponsible behavior. Doing dumb things can make you alot of money, which makes them not so dumb I guess. Markets seem to move in such a way that the most responsible people get stopped out and miss the rallies.
At any rate, when things aren't working the best you can do is take some time off to level yourself and come back to the market with a clear mind. I'm looking forward to hearing about your dive trip, sounds awesome.
"I'll be around for the Op/Ex, looking for a small hail-mary play. "
I think SLM calls are going to be my hail mary but we'll see.
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