Disaster day…

If this is your first time visiting, check out the story behind this blog. Otherwise, please join the others by subscribing to my RSS feed or get updates via email so you don't miss any personal finance articles!

Day’s Gain: -$4275.82

I’m not going to post my portfolio since I made many emotional decisions today so I will just post this. It was the IPO of Nymex (NMX) and I bought 100 shares at $135 and saw it go up to $140 within 1 min. Then I got really excited and kissed my girlfriend and went to work. By the time I got to work, it was down to $133 and I got really nervous. I sold the stock when it got up to $136 and I felt pretty good since I still made some money. Then, it went up and up, and that’s when greed took over. I made many trades at 300 shares, and actually made another $150 dollars and then I started trading a few at 400 shares and I was up $453 with this stock when I made my biggest mistake. I chased this stock for 400 shares at $143.80, and I was going to sell it at $144.30. Of course, it never got sold, and it kept going down. I was stubborn, and never sold it as it went up to $144.20, then it went down from $144 to $142, and then further down to $140. At this point, I was sweating, but I kept telling myself to wait for it to come back. This of course did not happen, and it went further down, and down and down to $132.15 when I couldn’t take the pain and sold all of it. Of course, the second I sold it, it went back up and it finally closed at $133.99.

I totally blew up today, and the loss that I incurred was 80% of the gains that I made this year. I also sold GameStop, Best Buy, and Sears Holdings which I could’ve made some more money if I were to hold onto them since they all bounced after I sold them. Today was a big beginners lesson that I have learned and have to pay for (this was really my first “day trading” session of my investment career).

Few things I learned from today -
1. Never be stubborn and try to wait it out. Capital preservation is key to trading success. I should have taken the lost when it was $142 since it hoovered there for 5 minutes and I could have sold. There can always be another trade at a different level.

2. You need complete focus and do not try to do this at work! I can’t believe I was trying to trade at work. I can’t say that I would not have done the same thing at home but I should not think making money for that easy!

3. Do not trade at $$$ levels that you were not comfortable at. Up until this point, I was investing stocks from $5,000 to $15,000. Then with GameStop, I started to trade with $20,000 and it was already over my comfort zone. Then with Nymex, I was trading at the end with $50,000!!!! This was easily many times what I was comfortable with doing, and emotions took over when the trade did not go my way. I ended up not only messing up my capital with one stock, but also my other holdings in the portfolio too since I thought I should hold onto the stock and sell others so I don’t get a margin call. (in the end, I sold all the Nymex stocks so I didn’t need to do that in the first place).

I will regroup and try to give an update after the thanksgiving holiday since I will be going to Canada for the week and will probably let my investment run but not trade at all.

Tagged as: Personal

Related Posts

• Disaster Planning
• Fixing True Life Finances
• Read Good Articles While I Get Scammed By a Blockbuster Coupon Edition
• Start of a short week!
• The Plastic Generation