Tuesday, August 5, 2008

A Nice Walk Through Some Fire


Who would have thought, that at 9:40am this morning, I would be looking at my worst day ever in over 9 years of trading?

Who would have thought, that at 9:40am this morning, I would have lost my rather impressive month of July, and blown out of all the funds I had remaining in my company?

Who would have thought, that at 9:40am this morning, I would have called Judy into the office, showed her my loss of over $10,000, showed her my heavy position (2500 shares) of CLF and said to her, "It's done now. I'm blowing up for good. If it trades $91, I'll be forced out and I'll have to find a new job."

And who would have thought that at 9:50 I would be up nicely on the day, Judy and I would be giving each other hugs and high-fives, and I'd be liquidating my position and getting ready to take the rest of the day off?

Surely, not me. But sometimes, funny things happen to stock traders.

At 10:45 I was walking hand and hand with my daughter through our CSA, picking flowers and placing them in a bucket. I was still somewhat shocked at the turn of events, and shaking my head at the absurdity of it all.

Indeed, I felt like one of those people who has looked directly at death, seen the light at the end of the tunnel, only to wake and live again.

16 comments:

Addict said...

wow, you dodged a bullet there. If I were in that trade, CLF would've went through my stop and THEN go back up for sure.

Dinosaur Trader said...

I started buying at $98.23... so believe me, my "stop" was hit many, many times.

I dodged a career ending bullet. I hope I don't see another.

-DT

OBAT said...

That's some scary shit. These days I am afraid to take anything larger than 300 shares in CLF if I ever trade it. The stock freaks me out. You got guts DT.

Tyro said...

I've never seen you like this before. Not just ignoring stops but the position size seems ten times bigger than normal. What happened?

I can understand that you may not want to go into this with us but I hope you do something to stop this. Maybe your office's risk manager could help.

Good luck man, don't scare us like that.

Dinosaur Trader said...

OBAT,

For the record, I started buying 100 shares, than another 100, then 300... I started small and then things got a little crazy.

Tyro,

I actually feel lighter than ever. I think I broke through some fear that's been dogging me for awhile. I think everything is good here.

-DT

Bluedog said...

Scary day, DT! Did you have a plan for when to pull the plug, or were you riding that train to hell? I'm glad it turned around for you! Close call.

BD

Dinosaur Trader said...

BD,

I was the conductor on the train.

There was no rational plan. But stocks don't just decline forever, and dropping 10% in 10 minutes isn't normal behavior. Other stocks in the group began to rally, and that gave me some gumption.

-DT

Dogwood said...

Yikes.

Now don't do it again.

I will not come to this blog to read about the conversation you had with some putz over the water cooler while working at a cubicle farm.

Besides, if you blow up, I'll want a refund on my blog subscription and you won't be able to afford it.

Glad everything worked out.

But seriously, don't do it again.

StockHunter said...

well, I can at least tell you that a guy from my office, shorted this pos 2000 shares at the open and covered it 2mins later with a nice 2pts or more profits.
C'est la vie...

Jawbreaker said...

Obviously iam happy that you didnt blow up or even lose money for that matter but you should never put yourself in that position again. Its not the way to live. Iam happy for you though, honestly.

bloggerdotcom said...

I'm glad to see this work out.

Reminds me of my first week trading... except the stocks didn't come back.

coolproptrading said...

it looks you just gamble without sufficient risk control for a falling knife. there is actually nice pivotal line support and resistance in 5min chart for this stock.

lisa said...

What the fuck??? Or, to translate to your three letter acronym language: WTF???

Explain to those who speak dewey, please!

Dogwood said...

DT,

I pulled up the CLF chart with pivot points plotted and this is what I see.

The stock gapped down at the open with the open below the day's pivot point. Price then went up to 101.75, where it was stopped dead in its tracks at the day's pivot point, then it was nothing but selling for the first 15 minutes until price crossed S2 and stopped half way to S3.

From there, price rallied to S1 at 10 a.m., then sold off to below S3, before turning and climbing to S2 at the close

The resistance at the pivot point was the key to understanding where this stock was going.

Generally speaking, if a stock does not break above the pivot point, it is going down and the only question is how far.

For example, whenever the NQ futures contract opens below the day's pivot, I always fade the first move to the pivot. If buying is strong and TICK readings are high, I wait to see if price will break through the pivot, then short NQ back to the pivot.

The day's pivot point is key. It tells you instantly which type of setup you should be thinking about, long or short.

And if a stock gaps down and you fade the gap, which it looks like you did here, then always look for a reversal at the pivot point.

I've recommended pivot points to you in the past but don't know if you have spent anytime experimenting with them. If not, I understand, but they do tend to keep you on the right side of the trade.

Enough of the lecture, I'll turn off my concerned father voice now.

Be careful out there.

Soulfire said...

Now this is interesting in that you have a chance to explain what was going on in your head at the time- your reasoning process.
Now you're a seasoned trader that knows the golden rules not to break, but something that morning caused you to break those rules again and again...trading on gut instinct and adrenaline rather than cutting your losses at a predetermined loss value.

What made you veer off track? It's important you figure that out since you were on the verge of a career altering loss.

By the way, you do realize that in an alternate universe, CLF never pulled back and kept crashing- sending that Dinosaur Trader to his cubicle after life...

HPT said...

DT I'm sure your getting shit for this, rightly so, but Let me tell you, this has happened to me numerous times, and I haven't been so lucky. You already know that. But the moral of the story is, I let these catastophic events happen because I was winning and feeling cocky leading up to the event. Instead of trading with my usual stops, I felt I could let the trade ride because I was up nicely on my account as a whole, but it is this one time where you let your guard down where the worst shit tends to happen. Its happened to me probably 8 times or more. God Dam it. I suck!
Thanks for sharing with us your story.