Thursday, July 12, 2007

I Lost Money On The Long Side

Yes, that's right. The market busted out to record highs, killing short sellers and enriching "the Fly" and "the Dinosaur" still managed to lose money while buying stocks.

Clearly, this is a message from God.

"Fuck the shorts!" I yelled at no one in particular... at the screens, at the TV and I bought stocks all day long. My biggest loser of the day, TNH, actually closed negative for the day! Amazing! How do I do it? I don't know. Let's talk about TNH and maybe one of you can tell me where I went wrong.

I was patient and watched the stock for the first half hour of the day. 2 days ago, 132 acted as support and then, once the stock broke through that level, it acted as resistance. So I figured 132 was an important level that was developing. With the market strong right off the bat this morning, I was thinking of getting long the stock. So, in the first half hour it played with 132. Right after 10:00am, it broke through and I bought 400 shares at 132.25.

The stock ripped straight up a point. So perhaps I should have sold. In retrospect, I definitely should have sold. However, with the market ripping and with this stock being one of the leaders of the most recent rally, I felt confident that it could go higher. Plus, I had a point of profit as buffer should the market dip a bit.

Anyway, long story short, the stock dropped like Miss New Jersey's pants in the next half hour and stopped me out down at 131 since I was giving the stock "room". I made a couple of other, lesser trades in the stock as well. Total loss, $398.

My other loser was MLM. This I traded twice with 100 share positions and managed to lose almost a point each time. The first loss is the one that bothers me the most because I thought it was going to work out.

I bought on the 4th bar of the day, around 161.65. Again, the stock initially worked in my favor moving up to 162, but then trashed my position and my already fragile mental state by dropping like a dead bird and stopping me out at around 160.50.


Anyway, I did have a couple of good trades. One a decent long in BTJ and the other a decent long in MOS. Still, they weren't enough to really help me too much.

So what do traders do when they retire anyway? Anyone know what some ex-traders have gone on to do with their lives? I try to think about heading out to be interviewed for a job and I can't imagine what kind of skills one gets from trading that translate into the real world. Anyone have any ideas? Fire away, I'll even turn off "comment moderation".

Here's the numbers:

Best, BTJ, $220
Worst, CMI,

shares traded, 10,800
stocks traded, 12, 6 positive, 6 negative
total trades, 62


wincity said...

I can feel what you feel. I was trying to buy stocks all day but didn't find anything I feel comfortable. Watched TNH and BIDU closely but neither did much despite the crazy market.

You could've lost on many other stocks on the long side too, ICE, FSLR, HURC. I shorted HURC and was a bit scared when the market went insane. I was rather surprised when it dived.

IMO, it's much safer to short at this moment, especially if a stock goes crazy. Tomorrow morning there could be many good spikes to short.

Prospectus said...


On TNH, you probably should have moved the stop to breakeven after it broke out. One rule I have is that once I'm up about 1R, or the distance from my entry to my stop, I'll move the stop to breakeven rather than take a loss. What was your trade timeframe and target? This looks like a nice ascending triangle setup that easily made the target (the breakout point + the triangle height).

On MLM, is your blue MA a 5 period EMA? If so, it was a bit overextended from that to be taking a long position. I find that when I buy / sell far from the 5-ema, my timing tends to be wrong and I get stopped out more. My goal is to buy a break of a consolidation, and to let those who are chasing the move take my position off my hands. I don't always do that, but my best winners seem to follow that pattern. Again, I don't know if these were swing trades or what, but if you're watching a 5 minute chart you probably had a short timeframe in mind?

I got nailed on my trade today, too, so I know how you feel.

What do traders do when they retire? I don't know, but engineers want to trade when they retire. ;)

Dinosaur Trader said...


Yeah, the stocks I was in just felt stuck today. There was a lot moving, but I just wasn't in it. It was simply frustrating.

I kind of think tomorrow could be dead. I hope I'm wrong.


Dinosaur Trader said...


That's a big debate I'm having with myself... to move to breakeven or not... or, to trail the stops really close once a trade moves in my favor. I've let many winners turn to losers lately by holding too long.

I posted the 5 minute on TNH just because I thought it was easier to see the consolidation. My time-frame was actually a bit longer... in fact, I would have held all day if it had acted like MA. :)

Anyway, thanks for your input. I do need to work on managing the trades I get into better. It's all a work in progress!

So, perhaps I should look into engineering?


wincity said...

Tomorrow could be a dead day overall, but the opening could still be wild. At least for some stocks.