Wednesday, April 18, 2007

The stock market hates you

This may seem funny but it is an important rule to remember and it is very true... the stock market and all of the stocks that comprise it, hate you. Had I remembered this simple rule today I could have avoided some of my losses.

I lost a total of $379 today but I lost $534 in just one stock, RAS. My next biggest loser was for $58...

Why did I lose so much in this one single stock? Because I over-traded it.

Why over-trade it? Because I've had good success in this stock recently. I thought I "knew" the stock...

Wrong. Anyway, I won't get into all the details of my trades in RAS because not one trade really stands out as awful. I just lost small in the stock, over and over again. I kept going back because I kept thinking, "This is the time I win". I've included the graph here with all the little lines I drew on it so you can laugh along with me. And I may make a new personal stock trading rule... if I draw more than 3 trendlines on a graph I should probably just leave it alone.

Other than RAS, I made one other error towards the close. I decided to "do an MOC" or Market on Close order in SKT. At 3:40 they published 500,000 shares to buy. That was some huge percentage of the daily volume in SKT, so I jumped on it and was filled around 41.80. At 3:50 when the updated numbers for the MOCs comes out I was completely shocked to see the entire order had been filled, "No Market On Close Imbalance SKT". Normally, if a stock with the daily volume of SKT has an imbalance of over 100,000 it at least has a little left for the last print.

Not this time. The stock dove. Once you enter an MOC order, you're locked in so there was nothing I could do but watch helplessly. So, the worst thing about this trade was that I was transfixed by it for the last 20 minutes of the day and I probably missed a couple of other things that could have made me some money. Luckily, the stock did print up to close at 41.75 so I only lost $50 but still... I lost.

Other than that, the day was pretty quiet here. I babysat between 2 and 3 because my wife had a dentist appointment and that kind of threw a wrench in my afternoon. Who knows? Maybe that was a good thing. And I got to hear all about the parrots at the aquarium.

Anyway, here are the stats:

P&L, -$379
Best: FED, $110
Worst: RAS, -$594

stocks traded, 28, 12 positive... 16 negative
shares traded, 40,400
total trades, 250

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