After my offbeat blog on my still-ongoing 2 week trial trading service, I had a blast the next day, netting $383.33 for the day, just about made up all of my losses. But today I gave it all back, so still netting a loss of ($255.51). Aside from actual buy-alerts getting stopped out, I also jumped into a few trades that were not the actual alerts. After my one-day wonder yesterday, I tried to front-run potential trades, in order to beat my peer subcribers and maximize my profits. I did so a few times today based on casual mentions by the master and actual trades posted by top traders. I’ve mentioned this psychological weakness of mine in my blog before. When I am winning, I become more reckless.
One such trade was NQ. The master complained that it was a boring day with no easy setups, except for NQ. I immediately jumped in as I saw a volume spike just happening at that very moment. No alert was issued. The stock proceeded to flag which looked good, except on the 60 minute there was a negative divergence that makes me nervous (even though these days the divergence hardly works any more and I swore to ignore it). I asked the master in the chat room if NQ still looked good. He said no. Not sure if it was coincidence or if someone in the chat room held it, but within minutes, the price puked hard. Half of my position was stopped out, and the other half I manually exited a few minutes after. Just like that, I lost $156, 5.21%.
Another was SIHI. This one was mentioned by a respected trader in the chat room. He mentioned SIHI to the master and the master just commented that it looked good. Again I jumped in immediately because it has happened a few times the master “followed” his top traders. But this time there was never any buy alert. As soon as I entered, I realized it was a very thinly traded stock with large spread and immediately the position flashed substantial losses. I sat on the trade for 30-40 minutes and took half off as soon as the price fell below the 20 MA. Another 30-40 minutes later, I took the rest off after it stayed below the 20 MA. That was a $122.50 loss, or 2.95%. This one was more painful because the stock eventually rallied.
And PAET, an actual buy alert that got stopped out, losing $117, or 3.60%. In general, trading the break out is really not my style because if the setup does not play out, I’d have bought at the top and the stop loss is normally large so as not to be shaken out in these high beta plays. On the other hand, if the break out runs, the master normally take 1/3 off fairly quickly and the rest would be exited in in tiers. As my positions aren’t large enough to justify taking 1/3 off, I’d take 1/2 off or often the whole position off. As a result, it often take a few winners to break even with a losing trade. I’m naturally a bottom fisher, where if the play didn’t pan out, at least I would not be buying at the top.
Today the broad market rallied hard, up a whopping 1.67%. It was a one-two punch. First the Greece will officially be bailed out, causing a green gap. Second, during the mid-afternoon, Obama and the Houese Speaker have allegedly reached agreement on raising the debt ceiling while promising $3 trillion spending cut over the next 10 years. My portfolio duly sucked wind as it is heavily weighed on TZA and SPXU, the bear ETF’s.
Portfolio Value: $132,800