Tuesday, July 2, 2013

The One Where I Start


It's been just under a year since I started trading hardcore.  And I am ready to tear my hair out.

Let me start with saying that I had an unfortunately fortunate beginning.  I say unfortunately fortunate because it was something incredible good which caused something bad in the long run.  My first foray into options (my vehicle of choice on my path to riches) was buying puts on $AAPL.  Crazy right? My first step was shorting the biggest name in the market.  Well, this step netted me just over $20,000 in profit in just about a week.  This was amazing! My head was spinning! I called my wife, we booked vacations, paid off credit cards.  I thought, "wow, this really is going to be easy."  THAT was my unfortunate part.  As I will later read in a blog by Brian Lund, bclund.com, one of the worst things to happen to a new trader is making hugely profitable trade.  My confidence levels were off the charts. I thought, "hey, I could do this every day."  And even my second trade, puts in $LULU, made me a few grand more.

But then reality hit.  I didn't manage the profits, spent way too much on options I didn't know enough about and soon, I was scrapping by making trades with a few hundred at a time.  1 option here, 2 options there.  Back and forth.  I fondly remember $PCLN tearing me a new one over multiple trades.  I was sick to my stomach.

I guess I didn't learn anything, because here I am again, scrapping the bottom. Where did I go wrong?  This is what I am here on this blog for.  To write about what I did right and what I did wrong.

Ever since the new year when I guessed the outcome of the fiscal cliff entirely wrong, it has been down hill.  This week was the last straw which lead me to start this blog.  I just can't get the direction of $AMZN and $LULU right.  I lose one way, flop the trade and lose the other way.  3 $AMZN trades and all but one for losses.  The only one that isn't for a lose, is my current put in $AMZN.  But the week isn't over yet.  $LULU has been osculating up and down, when it should be going down if the technicals were right.  But I actually held this one through a pop on Wednesday and didn't cut my losses.  It is dropping today so I have a little hope for it go positive.  But just like it keeps doing to me, it gets close to where I want it and then pops the other way.  Just out of reach.  I really need to stop hoping.  It's what I read and hear all the time.

As I am writing this, both my positions, which had sold off in my favor, has been gaining back ALL.DAY.LONG.  Seemingly, I just can't win.  The indexes are in the trash yet my shorts are gaining strength up.  We'll see if they are just playing with me and will sell back off.  Right now, I just want to scream as long as I can.  Bad day and probably broke another rule chasing $AAPL at the EOD.

Lessons I think I can take away from this week.
  1. Don't flip flop trades.  If it isn't going my direction, don't sell and buy the opposite.  That's just when it will reverse again and screw me twice.
  2. They rally the stock to sucker you in, then they pull the rug out from underneath you.

Maybe Friday will be special..... but I doubt it.


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