Wednesday, October 17, 2007

Thursday was "too many choices" day. I had a pile of things to choose from, and didn't choose too well. Shorted both VOD and INFY on gaps up. Both were positive for a while, but ultimately went against me. I had a 1R loss on BOD and a net zero on INFY after my trailing stop got hit.

Lessons: It's certainly possible to short into a rising market - many of the stocks I watch were moving down after gapping up this morning - but you gotta be decisive and you gotta be ready. I didn't get into VOD until 15 minutes after open and INFY until 23 minutes after open. Most of the big action had already occurred. Plus, there were stronger candidates than the ones I chose. In the future, I should choose higher volume over lower for my day trades. Neither of these were slow movers, but it woulda taken less time to find out I was wrong on bigger volume movers.

VOD I think I handled okay, because it was legitimate trade and I was simply wrong. I had a set a 1R stop and my stop was hit. INFY it looks like I got jumpy. It ended up making a significant move down later in the day - just as I had anticipated - but not before a brief spike up that took out my too-close stop. If I'da left my original stop where it was at 1R, I would have had a 1/2R excursion go against me before it finally went my way. This could have easily been a 2R trade - and certainly 1R - if I had followed the rules.

No comments: