Day Trading Post #74

So, after doing a bunch of research last night, I read about 2 things that stuck with me and made a lot of sense. First, I read about the psychology and nature of bull vs. bear markets and while it seems pretty obvious that people are driven by fear and greed I found the article very interesting because it made an interesting point. Basically, the article explained that Bull Markets setup in such a way that they try to keep everyone out. They move up, and try to leave everyone behind while trying to also prevent people from finding an entry into a position. Bear markets do just the opposite. They are designed to keep people in the market for as long as possible. The idea is the push the market down just enough little by little so that the majority of people will hold on to hope that it will come back. The second thing that stuck with me was something I read in an article as well, but sounds a lot like a proverb: "You only ask advice when you know you are wrong but don't want to admit it." So, applying both of those things I read to my trading, today was the day where I drew my line in the sand. Many of my positions were pulling back to the 50ema on the daily charts. I told myself that if they broke through, I was out. If not, I was staying in. Well, today, a lot of my positions broke the 50ema so I had to take the losses. My account value pulled back approximately 15%, all of which ate away into my profits. Overall, my profits were essentially cut in half over the course of this week.

The lesson I have learned, which is important.... lock in profits. I got a little to greedy and was looking for those homeruns again. I have to learn to settle for the small gains. On a positive note, each of the positions I entered were profitable at some point throughout the trade, but I held on too long. I need to learn to lock in profits and to not look back. Plain and simple.

In the mean time, I am gauging the market and plan to wait for us to flush down to support around 1040 on the S&P Cash. Then we should be set for some longs. I am now only holding AET and SIRI as swings. I also have 2 penny stocks long term which I noted were speculative plays.