Don’t you hate it when the stock tends to go higher right “after” you lock-in the profit on your long-position or go even lower right “after” you did the same on your short-position? It happened donkey of times and I believe there’s no reason why it won’t happens again in future. I was talking about Apple Inc (Nasdaq: AAPL, stock) which I scalped hours ago today. Couldn’t resists the temptation thus entered 3-contracts of AAPL May 155 Put Option with the intention of scalping.
Waited for two hours but the stock was moving (plunging) like a turtle. The profit was razor-thin and so decided to wait a little longer as my target was to gain at least 3-figure profit for the weekend. The stock reached my target and I mauled it like a tiger without food for 3-weeks. But guess what, right after I lock-in the profit, the stock drops further *smack myself*. You just can’t beat the market – can’t buy at the lowest and sell at the highest. That’s the fact and if you can’t get over it, chances are you’re not an inch away from the emotional trap which could affect your next decision-making on the remaining positions.
Just don’t get greedy when your position enters the profitable territory. But it’s easier said than done isn’t it? In reality, the deeper the profits enter into your terrain, the greedier you become. You tend to believe the profits will continue to build and it’s a sin to let it go. When the greed clouds your mind, there’s when the trap gets into you. The stock starts to reverse and you refuse to close the position because you believe the “difference of profits” erased are yours and you can’t accept the fact that you’re making less profit. Sounds familiar huh?
Well, get over it as there’ll be another trade another day. This is the basic investing or trading rule that you should prepare mentally no matter how hard it is to master. Hey, I’m still cursing myself every now and then. My God! Look at the huge sell-volume at 1:27pm trading hour *smack myself again*
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April 11th, 2008 by financetwitter
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I thought you were long on Apple holding May 140 call ?