It’s been a good morning for me. If you’ve been following my watchlist, you probably know that Centex (NYSE: CTX) treated me well. I was alerted to my entry of 44.13 this morning, and quickly got in short. I got out at 43.79. I could have stayed in the trade, but you can see that by bouncing to 44 twice, it broke its downtrend. If I notice it making new lows again on decent volume, I may jump back in. As of this writing, it’s still stuck in a channel above my cover price, so I’m happy.
[EDIT in evening: as you can see, I should have shorted it again when it started making new lows again around 12:45pm EST.]
Rambus Inc. (Nasdaq: RMBS) is a good example of why you shouldn’t jump into trades ahead of resistance that you think will break. My watchlist says I’m looking to short below 19.79. You can bet that when I saw it falling hard toward that value on high volume, I wanted to get in and score that extra profit. But, if I had, I would have been annoyed to see it halt at 19.86, and hover around 20.00 to 20.10 for the next 1.5 hours. As I was writing this, it did break my price, though, and I got in. I popped out again at 19.69, which in hindsight will probably have been too early. But, the dow and nasdaq indices were moving up again, and RMBS just wasn’t moving very fast. We shall see. Either way, two gains this morning, all from my computer picks.
[EDIT in evening: as is painfully obvious on the 15 minute chart, there's no way I should have gotten out of this stock when I did. Or at the very least, I should have gotten right back in. I gave up almost a point on this one. In my defense, on the 5 minute charts, in combination with the rising dow/nasdaq at the time, it looked like it might pop up above 19.79 again.]
I doubt I’ll make more trades today, as I don’t think anything else on my watchlist will trigger. At the end of the day, I’ll edit this post and add the charts. [EDIT in evening: AMGN did fall through my target price, but I didn't take the trade because I didn't like how vertical its drop was. It only fell about 20 cents before reversing and closing higher again. So, I think I made the right choice.]
An Area for Improvement
I know for a fact that, my biggest need for improvement as a trader is that I don’t ride profits well enough. I leave tons of money on the table. My problem is, I’m not bad at reading the tape, and I usually get out near a local top or bottom. That kind of reinforces the bad behavior, because right after I get out I feel really good about it. Then I check the stock an hour later and it’s moved another 30 cents in my favor. D’oh! At times, I’ve thought, well, all I have to do is just get back in when a stock resumes its trend. I don’t seem to be wired to do that though. I second guess those continuation moves a great deal, and I feel worried about giving back the gains I just took.
Competitive Tendencies
Also, I know it’s not a contest, but I want to point out that, if you look at closed trades on stocktickr in the last 10 days, I have 6 of the top 7 (I am user id ‘idempotent’ there). If you look at open trades in the last 10 days, I have 2 of the top 10. Not bad! So, even though you know it’s not a contest, are you wondering if you can beat me? It might be fun to try… As with all social websites, it gets better the more members participate.
| Stocks Mentioned In This Article |
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| Stock | Links |
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| CTX |  |  |  |
| RMBS | | | |
