I was very busy with work so even though my indicators started showing bearish signs on Friday 4/30 and also Monday, I did not set adequate stop losses and took some pretty big losses on Tuesday. I thankfully managed to get out of a lot of my positions by the time the big "crash" hit. But I still had some long positions and as it happened, I was driving around and internet-less that day.
As things started going bad, my buddy was texting me the dramatically falling prices. One text simply said "its a crash. down 900" and this triggered a panic attack for me. I was sitting in a car FREAKING out thinking "Oh my god! I may have just lost everything!".
Luckily the market came back and I had short positions on GS and QQQQ so my losses that day were not that great. What really took me out was a case of the fat finger on Friday. I was watching the markets and mid day Apple showed bullish indications. So I decided to take a long position by buying ONE call option. Accidentally, however, I bought TEN calls. So, I said "that is fine, I think it is going up".
And Lo and Behold, Apple rises ~$3! Jubilant, I check my position and see that I am DOWN ~$2000. Thinking that there must be widespread falling IV's because of the rise and the delta effect has not kicked in yet, I hold on to my position. My losses just keep going up, however. At -$2100 I realized I had bought TEN PUTS instead of ONE CALL!
As a result, I have now decided to take a break. I need to develop a more solid trading plan and always set firm stops.
I am working on using TD indicators. Below is a screenshot of a spreadsheet I am developing:
The spreadsheet can download 10 years' historic data for the stocks listed on the left. It then calculates TD Setup numbers on daily, weekly, and monthly charts. I plan to add TD Sequential and Combo as well to the table and finally add PLDot numbers.
I can then use this as a screen to find stocks breaking trends on the PLDot and combo completion.
-Wown
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