<Had EBay as my last trade on Friday and dumped it to get flat... >
Way to go, KM! It's often painful to dump a small loser at the end of the day to get flat... but a great discipline!! Everyone I've studied that's any good preaches this one as a key rule not to break. Even if you've established it as a swing-trade, you should at least be able to work it into a break-even position before you carry it; otherwise the loss should be cut.
The market has a way of often "teaching" you to do the wrong thing. For example, carrying underwater positions into the next day, they will often come back. But over time, following the well-known disciplines is the only path to trading success. Otherwise, they always catch up with you! I'm still working on a few demons of my own, as most all traders are. But the time-proven master principles like this one are widely published and available for everyone to learn. Most of them are completely non-intuitive, and very difficult to work into your trading consistently, unless they happen to come naturally to you. That's a major reason why so many new traders (80%+) don't survive.
I have found that the market is a very patient teacher, it will keep teaching you until you either "get it", or you "blow up" <G>
Congrat's on being "flat EBAY" instead of long it, for the likely unpleasant "gap down open" which is now less than eight hours away...
Good trading, -Steve
PS, If you do ever get stuck in one of these, one way to salvation is to sell calls heavily against the long position (CBOE calls it "stock repair", it works)... I've done it a few times way back, before I started tracking likely "earnings warning" windows and staying away from carries on those stocks during those periods. |
