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Penny-Wise, Pound-Foolish

Started by fortune8 · 1 year ago

Penny-Wise, Pound-Foolish ( cautious with small amounts of money, but careless with larger amounts ... )

People hold stocks with 50% loss and sell stock with 5% gain.

You have to break the habit if you truly want to make money.

Which stocks are down 50%?

How about solars and VMW?

Math question -- if you have 50% loss









... Continue reading »

70 comments

  • fortune8

    1 year ago

    SH*T

    SKF is flying once again !!!

    Yeah baby.
    reply
  • dealsaddict

    1 year ago

    sold MOS for a loss, shorting it. lol

    i missed out on skf, no money left to be buying more stocks. haha nibbled everywhere qid, twm, dxd
    reply
  • fortune8

    1 year ago

    deal, you cannot be going all in without stop loss.
    reply
  • dealsaddict

    1 year ago

    i got stopped out from my MOS short at 102. grrrr market seems hard to trade today.
    reply
  • fortune8

    1 year ago

    I missed the opportunity this morning.

    Not buying anything, just watching and may be do some shorting.

    Looks like rotation to solars. I am positive on STP again at 38 buy.

    DOW wants to go negative
    reply
  • troyhouse

    1 year ago

    dealsaddict, I have TOS and its platform is best, I can send you a referral if you are interested...!!
    reply
  • dealsaddict

    1 year ago

    thanks troy, but yeah I'm sticking with mine cos Im still new with options.
    reply
  • fortune8

    1 year ago

    Here is a weekly P&F chart for AAPL.
    http://stockcharts.com/def/servlet/SC.pnf?chart...

    If AAPL does not break 148, then it should be coming back down.
    reply
  • zstock

    1 year ago

    i got some kind of new toy installed at the blog
    MEEBO chat room
    i think it's pretty cool
    zee
    reply
  • zstock

    1 year ago

    now when you are playing comment tag with some one on Disqus--over there---you can go up into the live window---and play real tag for real---I think---
    like last night i was just missing contrare by two to three minutes---in the comments disqus comment section
    reply
  • zstock

    1 year ago

    well you guys really missed it--
    there were about ten people in the meebo chat room---me and deals and hillary clinton and Obama and judge dread, and John McCain and sunfun and guest 5 thru 8 and --Hillary kept screaming "vote for me in NOV"---
    reply
  • dealsaddict

    1 year ago

    lol i like how u call zeeper creepers, reminds me of that movie heheh
    reply
  • bigcap

    1 year ago

    I am glad no trades today for me ...GOOG is flat lining? unbelievable..

    Okay you guys...Gotta go and enjoy some spicy afternoon...

    Later..
    reply
  • zstock

    1 year ago

    GDX bought the Apr 49 put---
    I think CPE just kills GDX tomorrow and then add Michigan sentiment and it's dead by two
    reply
  • zstock

    1 year ago

    OIH--i don't like those 4 up day in a row cause any drop is only going to be 1 or 2% max--but next week--might get the $6 in one day drop--
    reply
  • zstock

    1 year ago

    man was I wrong about OIH--it just collapsed from $178
    reply
  • zstock

    1 year ago

    DUG 5 down days in a row = 70% - 80% chance up the next day
    DUG 6 down days in a row = 90% chance
    Fortune 8-there's no such thing as an 8 day falling knife --right?
    reply
  • zstock

    1 year ago

    BJS is in that 24 to 28 price channel---it usually behaves very well--
    sort of like my PCAR--always staying in it's $6 price channel
    reply
  • troyhouse

    1 year ago

    Bought JASO @ 17.93 at almost LOD....
    reply
  • fortune8

    1 year ago

    sell CF 112.05
    reply
  • fortune8

    1 year ago

    TK is shorting AAPL.

    at 145 he is 3 pts earlier then where I would have shorted, but then he is already making money.
    reply
  • fortune8

    1 year ago

    sell SKF 113.80

    will I get a chance to buy it lower?
    reply
  • fortune8

    1 year ago

    buy CF 110.25 with 2 pts stop loss
    reply
  • fortune8

    1 year ago

    something does not look right here.

    market is down but the VIX is down at the same time.

    no fear at all.

    tread carefully.
    reply
  • fortune8

    1 year ago

    sell DXD 55.85 if you can get it
    reply
  • fortune8

    1 year ago

    looks like the momentum has shifted to solars now.

    time to refocus on the sector for trades
    reply
  • dealsaddict

    1 year ago

    yeah no luck with ags today.
    reply
  • dealsaddict

    1 year ago

    yeah i nibbled on qid, dxd and twm hehe
    reply
  • contrarian

    1 year ago

    I have a math question, too.
    If I short a stock at $10 (hypothetically), at 100 shares, and it climbs $2,my investment drops 20%. Because of a lack of discipline, I am now faced with buying to cover, in case it climbs higher, or holding on.
    If I think it can't climb much higher, and it's just a matter of time before it drops back down, I have two choices.
    I can buy to cover, in case it climbs higher.
    Or I can hold.
    If I buy to cover, I take the 20% loss knowing I can't lose more.
    Now let's say the stock climbs another 50 cents, and then drops back to $12 -- and I get a sign from God that this stock is now ready to go back to $10. So, I short sell the $12 stock with my remaining 80% (800) and discover I can only buy 66 shares!
    How much further does that stock need to fall below the $10 price, to recoup my losses?

    I think that scenario should explain why shorting stocks is so f*(&#ing dangerous if you don't have a disciplined stop-out procedure.

    Another way to look at it is . . . for every 10% you allow a short-sell to go in the hole, if you buy to cover and then short sell at that same price point, it will have to fall an additional 5% below your entry point, just to break even.

    Ironically, if you ever get caught in a mess like that, before buying to cover, evaluate what caused the sudden rise in price. And if it is mere volatility, it may pay to hold - especially if you know you're in a bear market.

    I got caught doing something like that with ABK a month or so ago, and was taken completely by surprise as it rocketed up. Instead of having a "blind" stop in place, I let it ride thinking it was just a spike, and at the end of the day, decided to get out, in case it got worse.
    Of course, riding it back down just didn't offer the same profit opportunities.

    Tim Sykes talks about the added need of discipline with shorting stocks in a recent entry as well.
    reply
  • dealsaddict

    1 year ago

    lol mOS 104 or i have to do some panic selling. zee said so, f8 said so, grain futures looking bearish again.
    reply
  • fortune8

    1 year ago

    new post
    reply
  • fortune8

    1 year ago

    ski,

    Why do you need to pay for realtime charting? Don't your broker have anything?
    reply
  • ski

    1 year ago

    just curious.
    reply
  • ski

    1 year ago

    also, thanks for the moving average formula you posted earlier. i'll have to kick that around a bit...do you have a good success rate with it?....by the way, your blog is busier than beanie's...he gotta stop pumpin' solars in bear mkts....lol.
    reply
  • fortune8

    1 year ago

    Results are pretty good, but you need to be disciplined.

    Other times, there are fake moves that gets you in and out in a few minutes.

    Pull up a chart for any stocks today and you will see.
    reply
  • zstock

    1 year ago

    where is Bigcap--?--ACI down 3% today---but do i have a position--no -----too scared to touch the ACI puts---
    zee
    reply
  • ski

    1 year ago

    Z, i'm curious as to why you would not prefer the non delayed quotes stockcharts offers?
    reply
  • zstock

    1 year ago

    i'm a dummy---that's why--I didn't know they had real time?
    zeepers-creepers
    I'll have to look into that
    reply
  • fortune8

    1 year ago

    There goes the market and here I go to work.

    Hope you are hedged.
    reply
  • troyhouse

    1 year ago

    you are going to work and i was thinking of going home from work, lol
    reply
  • fortune8

    1 year ago

    It sucks having to go to work and the market is on the verge of falling.

    I let SKF get away. At least I still have SRS.
    reply
  • zstock

    1 year ago

    APOL reports after the bell?
    oh wow---straddle time---1.80 both sides
    cash in the winner and let the loser get back to even 2 days later
    reply
  • ski

    1 year ago

    fortune....i need to sharpen my very dull chartreading skills. i notice you use stockcharts.com, and was wondering what you can learn from them. i need to develop exit stradegies through chart reading. can you point me in the right direction? is a 5 min. moving average the closest thing to streaming you can get? pretty much in the dark with short term/ daytrading chartreading and any info would be greatly appreciated. thank you....paul.
    reply
  • fortune8

    1 year ago

    For day trading, I use 4ema, 8ema, 21sma.

    BUY when 4ema cross above 21sma. If you want double confirm, then both 4ema and 8ema.

    SELL when cross below.

    I vary between 1min to 5min chart.

    1min will give you an earlier signal than 5min.

    Also, the 1min will have lots of noise.

    Hence, if I see a 1min signal, I check 2min and 3 min for the same confirmation.
    reply
  • zstock

    1 year ago

    wow --maybe i'll try 5 minute--I've been using 15 minute, thanks guys--
    zee
    reply
  • zstock

    1 year ago

    BJS buying ap 30 puts ahead of michigan sentiment = 70.0--and CPE = 0.1%
    Isn't that something --they raised the CPE estimate from 0.0% to 0.1%---well Mich. Sent hurts retail and CPE hurts gold stocks
    reply
  • fortune8

    1 year ago

    Z

    I think USO is a short again 87-88.

    Just wait a few more days.
    reply
  • zstock

    1 year ago

    ok, UGA is already there--just can't seem to get higher than $4 a gallon for some reason---assuming 50- 51 or whatever represents $4 a gallon
    reply
  • zstock

    1 year ago

    I was looking at QID and it looks like it is gaining momentum- so tomorrow should be a really big white candle
    reply
  • fortune8

    1 year ago

    I hate to pick on beanie, but just a few days ago he was pumping AAPL to 150.

    Ouch !!!
    reply
  • dealsaddict

    1 year ago

    lol i was waiting on 150 to short too.
    reply
  • fortune8

    1 year ago

    buy SRS 95.75
    reply
  • fortune8

    1 year ago

    We are going down !!!

    Fed's Lockhart Says U.S. Near a Recession, Sees Slow Recovery
    http://www.bloomberg.com/apps/news?pid=20601087...
    reply
  • dealsaddict

    1 year ago

    lol f8, did u see about 2sweets on TK saying MER going down? lol time to load up on puts?
    reply
  • zstock

    1 year ago

    I've been hearing stories now that recovery might not happen until 2009---so the market might take my Santa clause rally away from me again---like it did in x-mas 2007
    reply
  • fortune8

    1 year ago

    sell QID 48.90

    come back and fight another day.
    reply
  • bigcap

    1 year ago

    F8 great call on DXD yesterday..

    Just watching didn't buy anything...

    This market not saying what direction its going to take today
    reply
  • bigcap

    1 year ago

    Hey Z i am right here...busy with my girl today ..lol..she is returned from long vacation....

    ACI puts..ummm..ok whatever man...you are great..

    Tomorrow is the day to load calls...i am still waiting..
    reply
  • bigcap

    1 year ago

    Don't u see economy sucks..see APOL results....no loans for students..huh

    APOL thrashed badly afterhours.
    reply
  • ski

    1 year ago

    i suspect i should look into one of the autorefresh services (19.95/mo., or 29.95/mo...stockcharts.com)..or do you think the basic service..(9.95/mo.)..any suggestion woud be helpful.
    reply
  • zstock

    1 year ago

    i have the 19.95 service it's great
    reply
  • ski

    1 year ago

    thx, ZEE.
    reply
  • ski

    1 year ago

    i'm pissed cause i'm in DUG, it,s gone from 44 to 37 in a week, and if i saw something on a short term chart, maybe i would have exited. (Boone killed it on CNBC last week, also).
    reply
  • fortune8

    1 year ago

    Support sits at 34-35.
    reply
  • zstock

    1 year ago

    fortune 8 / bigcap --36.5 is the buy signal--or now---cause OIH is thru which means XLE is quite near to being finished too---
    and besides $34 puts DUG 8% below the lower bb13,2 band---I don't think that will happen
    reply
  • fortune8

    1 year ago

    yes,

    I did buy SKF lower.
    reply
  • bigcap

    1 year ago

    F8 great post today..simple and honest.

    People hold stocks with 50% loss and sell stock with 5% gain.

    Man you are so right...so what is the best way to negate this? Why people don't sell after 5% loss?

    I like to hear some thoughts here...

    IBD always say average on the way up not on the way down..But still most of us do average on the way down.
    reply
  • contrarian

    1 year ago

    Let me chime in here and pi$$ everyone off. Long-term investing - you know what I mean - set it and forget it - is lazy. Let me say it again. Lazy. LAZY. Just give me your money, already.

    Not just intellectually lazy. Not just financially lazy. It's EMOTIONALLY lazy.
    You don't have to deal with losses when you say, "Oh, it's an investment."
    People suffer 50% losses because they're thinking like working-class instead of wealth-class.
    Hey, I'm working-class, too. But I don't think like them. 5 hours of sleep and the rest is work and research. If I'm losing, I'm pissed and starting the game over again.
    I can be stubborn, too, but not if I don't have a plan!!!!

    I'm not too tired to figure out the trend. I'm not too proud to pick up the pieces and start over again. And I'm not too weak to look in the mirror and say "What the F*(*&^% are you doing accepting a 5% loss without getting out!"
    You know what amazes me more than the pyramids of Egypt, the flight of the SR-71, and Apple's skinny laptops? You know what amazes me? Is the number of people trading the market without a clue as to where it's going. All they look at are stock charts.
    It's the equivalent of trying to drive your car by only looking at the instruments on your dashboard.
    Stop it! Look outside! If the terrain is rough, surrounded by cliffs, DO NOT drive in a straight line! That's what investing is - driving in a straight line! FORGET IT!
    I'm only yelling to help you see . . .
    I'm only yelling because I'm amazed . . .
    reply
  • contrarian

    1 year ago

    This rant isn't directed at anybody, so please no-one be offended. It's just something I needed to say - myself included.

    Sometimes a slap in the face can save more pain than it causes - Old Trader's saying.
    reply
  • contrarian

    1 year ago

    OK - that came across pretty harsh. Been up all night . . .

    I just wish that when I first started trading, someone had yelled at me when I was losing money.
    No . . . I wish they had smacked me across the head with a folded newspaper, and then yelled at me . . . .

    People can be so nice, it'll kill you.
    But a friend will always be honest, yes?

    You see my avatar? That's for me. The market is holding it, and it's pointing at my head. The money keeps me looking at the barrel - BUT I have to be willing to duck!!!!

    OK. I'll stop now.

    Good luck, my friends.

    PS. Regardless of news, odds favor us dropping further today.

    If we don't, it certainly seems to me that the market from Jan to now has transitioned into a new stage, which will mean more uncertainty until a new pattern emerges (will take a week).

    If the old market is still in play, we should drop for the next two days - easily.
    reply

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