Well... I haven't had a heart-attack yet! But man, this shorting stuff is quite a ride!
Let me just preface this by saying that this is going to be an embarrassing process for me... learning in public via this blog! All my stupid moves will be put right out there for y'all to laugh at and hopefully learn from!
Hey, would any of you readers that actually have experience with this trading stuff please leave comments correcting anything that I write that is wrong... and also providing suggestions for what else I should look at, or how I could have handled a situation better? I'd love it if you would share stuff like that... and I'm sure the other newbies would too. Thanks, in advance, for that!
Enough preamble... here's the story of today:
Last night, I checked out 13th's (http://darksidetrading.blogspot.com/) and the Market Kid's (http://themarketkid.blogspot.com/) posts to see what might be interesting for today. When I see what those guys are suggesting, I take a look at the charts. I'm still trying to learn what to look for, but there are some basic things I like to see... for example:
- I like to see something that has spiked up or gained a lot over the past few days. I have charts set up a couple of different ways. One is a daily chart set up to see the green (or white) candle pierced by the UBB (check out Muddy's and 13th's blog postings for more on this). And I also have 5 day, 10 day, 20 day charts so I can see at a quick glance what the stock has been doing in the short term.
- I like to see how far down it might reasonably be expected to go. Look at the GWDC chart... that was up a ridiculous amount over the previous few days. And it looked to me like you could reasonably expect it to drop back down to at least .07 (and probably further). I don't want to short something that doesn't have much room percentage-wise to drop. If I'm going to put myself through this, I want there to be a decent-sized reward at the end of it!
- I check out news to see if there was anything meaningful that caused it to increase so much. A cool site for this is http://www.finviz.com/quote.ashx (someone from the GOTS chat told me about this). All the news is at the bottom. I love being able to see all the news so easily... plus you can easily see when earnings is coming out... and a bunch of other stuff.
If I like what I see, I'll try to reserve shares for shorting. I do this by placing a limit order to short the stock at a very high price. My trading software will usually reject the order right away if there are no shares available.
Anyway, last night I reserved shares for BIOF, GWDC, ORS, UPFC, MDII, and MRGE. (By the way... I really only like to trade stocks under $5).
Today I was ready! I set up some alerts to tell me when those stocks were close to going red on the day (i.e. trade price < yesterday's close). My computer beeps at me when the alert hits. So, the market opens and things start moving. I'm watching the GOTS chat... I'm trying to keep my eye on what's happening with my potential shorts... alerts start going off... and I'm a ball of confusion. Damn, things happen fast... especially at the start of the market! The HOD/LOD list is flying! Things are flashing! There is just so much input! I don't know how 13th does it... he has all kinds of watches going on... and open positions... etc.. Plus he's alerting and chatting. He's my hero!
I'm also keeping my eye on PMI... I had shorted it yesterday, but covered for break-even. Later in the day, it took a good dip. Damn... I had missed it! One thing I'm learning is that I have to be much more patient. This is hard for me, because my body starts to tingle and go numb when I see the price going above the price I shorted at. I mean it!... something weird happens to my body! I can hear my heart pounding... my hands start shaking and get all clammy... I get dizzy... you get the idea! Anyway, I'm trying to work my way through that. I may find that I'm not cut out for this... we'll see. I'm still new at this... I may get used to it.... either that, or I'll be an alcoholic... perhaps both!
Sorry to digress... so I was watching PMI and I decide to short it (500 shares) at $4.20 (it was getting close to yesterday's close). That was at just past 10AM. After shorting it, I put in a couple of alerts to let me know if the price spikes up or drops down to where I might like to think about covering. At 12:30-ish, an alert goes off telling me that the price had dropped to $4.10. I'm thinking "Shoot, this puppy has more to go... and besides, this is only a 10 cent gain... barely covers my commission" ($12.95 x 2... I know, that's an expensive commission... I'm working on that). I watch it drop to a low of $4.08. All the smart people in the GOTS chat have covered by now... but not me!!! By God, I'm being patient!!
Well, that was the low of the day... and then it started climbing... slowly, at first... though it picked up steam. Can you hear my heart pounding?
(to be continued - check back this weekend. BTW, this wasn't the only trade of the day (she said sheepishly)... more to come)
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2 comments:
Sounds great. Try reading "Trading In The Zone" by Mark Douglas it will help with th physcological end of trading.All that sweat tingly,jittery,hair pulling feelings are all part of trading, but once you lose enough trades then you will start getting cold to your emotions, both good and bad. This in my opinion is the hardest part of trading. Best of Luck
I am right there with you! I get the tingly, shaky feeling too -- sometime I shake so much that it's difficult to drive the mouse! I shorted PMI at 4.26 and put my alerts in. Saw 4.11, thought it was going to go below 4 and tried out some of that stuff you hear people talk about -- patience. In no time, it had gotten away from me and I covered at 4.30 -- turning a $0.15 profit into a $0.04 loss. I wish you luck, hoping you do better than I have been able to.
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