Stock Traders Blog

Lose Money on First Trade After Fresh Start:
I try to be more conservative with a fresh start of a clean cash position of $30,000. I started with a trade shorting 750 shares of BAC yesterday in after market at $11.88. I decided not to follow the market actively and I got up at 8:00 AM PST this morning. Obviously I was kind of late. If I was up early and watching I might increase my short position when BAC went up above $12. So my first trade after my fresh start was at lost. I covered it at $11.96 and lost about $76 including commission. Fortunately I was following my trading guidelines and didn’t lose much.

Live a Low Beta Life:
That is it if I follow the guidelines I will lose less when the market goes against me but I will also earn less when the market is going with me. It is like I choose to live a life that has a low beta. The ups and downs will be small. I feel comfortable with a “low beta life” though. But you may not found it as exciting reading my blog. I will still make the decision to increase bet depending on market condition otherwise I will not be fully making use of the capital I have.

View on the Market:
I think the sentiment on financial shares is still bullish especially on Bank of America because of the analyst upgrade yesterday. Investors now have in mind the idea that bank shares could be double or triple in the next several years affected by some of the analyst’s opinion. Their upgrade is trying to reinforce the price target of Gold Sachs and Morgan Stanley. It was a laughable target then but investors are giving it a second thought.

Investors are trying to convince themselves that BAC is worth more than $12.00. The only thing dragging it was the other financial shares which was affected by the concern on unemployment rate. I feel Bank of America on its own would’ve shrugged off any bad news till $13.00. But frankly I believe the analyst was speaking for their firm’s large holding of bank shares. They would not wait till it double to exchange it with you for cash.

Anyway I was wrong on shorting BAC yesterday. At least I should’ve set up a short order at price above $12 yesterday so that even I don’t want to watch the market I can still make money. I think the DOW should try 8,900 next week so I will try to be on the long side. But I don’t want to long BAC. I want to long USB when it is below $18.00. I feel USB has very good support when it is under $18.

Again t is a losing day for me

Account Balance Change: -$76.74

Related posts:

1. No one Understand Bank of America’s Book and I Hold Shorted Position For The second Day
2. Trade Option for the First Time of My Life
3. I Had a Short Squeeze First Time in My Life
4. Citi Group Keith Horowitz’s Downgrade Ruin the Party
5. Jackson’s Death is equally Surprising as BAC’s Downgrade