Stock Traders Blog

As you know I am taking the long side right now. I am holding Patriot Coal and Bank of America and I am losing big. When I say big I mean it is over $1,000. I remember there were a few trades that I lost big by taking the short side. The first one was on Wells Fargo (WFC). I was shorting 3000 shares of WFC at an average price of about $24.50. The second one was on BAIDU (BIDU). I was shorting 200 shares of Baidu at an average price of about $275. The third one was on Bank of America (BAC). I was shorting 2000 shares of BAC at an average price of $12.50. I lost on all three trades when I covered those shares. The total lost of the three trades was bout $15,000.

Looking back I felt I entered all three short position at a price that was not so bad. I was just not strong enough to hold them for a long period of time. For the trade on WFC I could’ve made profit if I had held it for three trading days. I clearly remember someone told me on yahoo board that I would be fine if I held them for a few days but I was too scared. See the following link to yahoo board

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=19829&tid=118335&mid=118431&tof=-1&rt=2&frt=2&off=1

It was the same for Baidu. For BAC if I had held it for five days I could’ve make profit. For any of those trades if I can hold till now I can make over $1,000 on each of them. Of course I can’t own all these three positions at the same time. I am just assuming. If I hold the short position on WFC till now I can make $4,500 instead of losing almost $10,000. In fact my trading started to fall apart after the big lose on shorting Wells Fargo.

Before the big lost on WFC I strongly believe in a trade methodology that you can start a position with small money then keep adding to the position when it goes against you and eventually you will see the turns and you can get out of it with break even or profit. I was able to make $10,000 in just a few weeks. But the problem with this is that your position will get very big when your holding keep going against you and it can max out your account before you see the turns if the entry point you choose is not a good one or you start too big. Eventually your position will get so big that you are too scared and give up. That was what happened on my trade on WFC. Thinking back this methodology may still work I just need a strong mind and a better decision to choose an entry point with the right amount.

I forgot to mentioned I had another big short trade. I ever shorted 10,000 share of LINTA at $5.16 average back in April before I started this blog. Same thing if I had waited for three trading days I could’ve made profit. I didn’t make any trades today. My account was up a few hundred because both of my holding went up a bit. I will update with you again tomorrow.

Related posts:

1. Should I Short Baidu at $318
2. I Have Too Many IFs in My Mind
3. Minutes on of Learning From the Past Stock Tradings
4. Trader’s Mind is Full of Dilemma – My Thought Gone Wild With Bank of America
5. I Should Increase Holding Position When Obvious Earning Opportunity Presents