Let's start with my Aha! moment on Tuesday. Nothing had happened all morning; slowly momentum began to develop to the downside and I started to short. But I was too early; it bounced and i lost a chunk. Got out and entered again ten minutes later and the trade got under way... it faked us out, but I had entered well above and added more shares. The stock moved lower and tested support; it bounced again. Now, at this point the day was getting close to being over (I had been in this trade for almost an hour, waiting patiently), and I decided to take the profits on the table. As Jesse Livermore said, no one can catch all the fluctuations... the real money is made in the big moves. Thus, the goal is to hold until you can't stand it any more when you are getting paid. I covered my short for a $90 profit. The market then sold off for the next 45 minutes. Let's just say that every body got the Christmas bonus but me.
So today I decided to put my new knowledge to work. My ambition/impetuousness got the better of me and i lost a fair amount 7 minutes into the trading day. I say a trade and i entered, just like yesterday afternoon. This time, I was confident. The market was whispering in my ear and by golly I was going to hold. It kept looking like the markets were going to go through that key level, I started to hope, I ignored the slight changes in my indicators (we call the TICK, ratio of rising/declining stocks, and the TRIN or "Trader's Index", a volume measure of institutional buying or selling, our market internals), and i lost a little money when I got stopped out and a reversal occurred.
But I was happy! Never in my life had i been so happy about losing money! I screwed up by having overly optimistic (or on the short side, pessimistic) expectations of follow through! But I finally realized I'm not after nickels and dimes! I need to get PAID! Its crazy because every day is like a battle.
My boss will type into the IM, "BP possible short/ Let's do it/ short it;" He's talking to 30 of us, so of course he's yelling at people who are doing nothing. He continues, "Short it/ Now/ Short it.... it's the battle of Dunkirk at 109 (on the S&P)/ if it breaks get PAID!" All day long, like a good football coach, he's screaming at us. And like football practice, the pressures never off no matter how far behind or how far ahead your team is. Speaking of sports, the boss has been watching the World Cup when there is nothing to do.
What causes more emotional distress than losing an ass-ton of money? What causes more elation than getting handed wheel-barrows of money (unless of course we're talking about Weimar Republic)? This business is unlike anything else... you must be completely calm one moment, a Zen mindset taking in all the markets whisper in to your ear. Then at precisely the right time, you must transform into a Warrior and attack like Lone Wolf and Cub. In this environment, we all have to be careful. Is the economy recovering or is it not? Some days we get good economic news, the next is horrible. The news programs fill our heads with nonsense b/c they don't really have anything of substance to talk about most of the time. Even though sovereign European Debt has been a problem since September... every other day its on the front burner. Will china overheat? Will its bubble burst? When will this damn oil spill stop? Why have we all of a sudden found massive deposits of minerals in Afghanistan? Why was our top commander a complete ignoramus when it comes to politics? Vespasian or Marcus Aurelius would have had his head!
In my following posts I will attempt to focus on analyzing politics, economics, and the markets. While I see this as a journal for myself, I would like to share with the world my thoughts and opinions... in so doing, hopefully I can inspire someone to think.
No comments:
Post a Comment