Dear Fellow MC Students:
I am in the chat room most every day bit not really an active chatter. I'm writing this today to help me clear my conscience a bit and I also hope that since I am in a community I can save some others some grief.
My story centers around breaking 4 rules that we routinely are hearing reinforced every day in our trading journey.
1) be careful holding overnight - I bought $APRI on a Thur market close and held overnight. A recent PR said they would post FDA news on a date that fell on the Saturday. I should have known that likely meant Friday.
2) don't go too big - I took a total dollar position that was 10% of my account on the purchase.
3) cut losses quickly or intelligently - I awoke to the 7 AM pre-market to see bad FDA news and the stock down from my $3.20 entry to just over $1.00. There was a bounce up to near $1.20 and I didn't sell any.
4) don't hold and hope - I held for quite a few weeks and the firm did an offering, doubling the shares outstanding at .50 per share. I could have sold at .90, .80 or .70 and didn't.
So it's safe to say it's a 100% loss of 10% of my account. Let's be fair and call it a total loss of the original amount.
It's not a mortal wound - I still have enough cash to continue to learn, be careful and maybe eventually grow my account correctly. I have not blown an account to $0 here since I joined last Aug and I never added money to my trading account.
The other problem with getting in this situation is how it can paralyze you and bias you to either revenge trade or simply not trade and miss a good opportunity.
I haven't wanted to download my trade history from Schwab to profitly because I'm embarrassed. I really do hope writing this will help me get over that and back to learning and sharing. And I really do hope I help someone avoid a similar chain of mistakes.
Safe and profitable trading to you all - I'll be at the conference in the Fall so please say hi if you see me.