I went insane last nite with a false bullish signal, and went for a call. The damage is heavy, $220 loss.
Mistakes I made :
(1) Went in for a call during a down market last nite. The overall market sentiment is heavily bearish.
(2) The range of option premium was around 13.80-15.60 that time. Buying a call at $15 is expensive towards the top end of the range. Risky.
(3) Fail to cut loss according to my $1 cut loss plan for high volatility stock like GOOG, BIDU. Less volatile stocks like GS, BSC, AAPL and RIMM should be 0.50 cut loss.
(4) Did not wait until the 2nd session of the market before went in for call. Should wait till 1am, as planned.
(5) 15min chart MACD never cross 0 up. It crossed back down below 0 area. Not patient enough to wait for this crucial confirmation signal.
Things I did right :
(1) After confirmed price will stay below $620, cut loss @ $12.80. Price closed @ $11.70. Saved $1.10 if did not sell.
The mistakes are not new. Mainly old, plain, simple mistakes that I have made over and over again. Again, it shows my mental focus is not strong enough.
17 October 2007
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