Linda’s Current Trades
Don’t Anticipate Market Moves With Your Hard Earned Cash
Flying home from the Boston area, I pulled out How to Trade in Stocks by Jesse Livermore, commentary by Richard Smitten. I didn’t have a highlighter with me, so I kept dog earring the pages of all the amazing quotes. My sister-in-law is a librarian and I hoped no colleagues of hers were anywhere around me, cringing at my book abuse.
I’ll be honest. Up to 2 weeks ago, I was listening, watching, or reading any and all stock investment advice I’ve been able to get my hands on. But when the market just had 2 tough weeks, I didn’t feel like reading or listening to anything on my flight up. All I wanted to do was spoil my grandson as much as possible.
When I pared my portfolio down to two thirds in cash, I felt I could breathe a little better. By the time I was on that return flight, the desire came back to continue my learning. And that book is full of gold nuggets! And the more I read, the more excited I got about stock trading again.
Knowledge Is Power!
Fast forward just a tiny bit to Sunday. It was my preparation day for returning back to the classroom full time, face to face with my students. In other words, reality was back. I spent the whole day doing lesson plans and figuring out some of the technicalities of teaching with all the constantly changing COVID 19 requirements.
By 10:00 at night, I finally got to my stocks. I listened to a couple of analyses from Investor’s Business Daily and looked at the current charts for my small stock list. Then I set up stop loss orders on most of them, most importantly SQQQ. I had gotten it into my head that we were headed for worse times this week, which brings me to this subheading.
Don’t Anticipate Market Moves With Your Hard Earned Cash
I was up a nice amount on Friday with my SQQQ. It is basically shorting the NASDAQ market, meaning if the QQQ ETF fund is going down, the SQQQ is going up. But just recently I learned that it is not an equal in the opposite direction. It is 3x the leverage, which is amazing if I predict correctly, but 3x the loss if I’m wrong. And that brings me to Monday.
Monday, Sept. 14, 2020
SQQQ – Sunday evening I put a stop loss order to sell if the price went down to $25.79. It had currently been over $26.56 in Sunday night market after hours trading. I carefully chose $25.79, because I didn’t want to lose anymore. I also put stop losses on AAPL and MSFT.
When I went to take a picture of my students to record their new seating positions, I saw an alert that SQQQ had sold. I thought, oh well, I guess the market strengthened and it’s a good thing I had that stop loss in there.
At the end of the day, though, my total gain according to my account was .6%. But when I compared today’s ending total with Friday’s, I only had a .28% gain. Why the difference? Because I had a bigger loss from SQQQ than I anticipated. You see, my stop loss price was $25.79. But because I entered it when the market was closed, it couldn’t do anything until the market opened. And SQQQ opened at $25.37. So I lost $.42 per share more than I wanted to.
I had anticipated the market going down on Monday and I lost. I lost more than I had gained on Friday, almost double. I have to learn to take my gains and wait for the market to show me what it’s going to do. Guessing is just a gamble as I just proved to myself.
I briefly considered buying TQQQ, the triple leveraged ETF that I sometimes buy when the market goes up. But I knew I couldn’t watch it at all, and with the market being volatile, I quickly extinguished the thought.
AAPL, ADBE, and NOW each went up about 3% today. NVDA went up almost 6%. Do I wish I had more stocks in them? Of course I do. But I didn’t miss the pull back on them last week and lost less money because I had trimmed them. My stop loss orders are set for the end of this week, so if those prices don’t get triggered, the stop losses will expire and I’ll figure out what I want to do next weekend. If the market sours, I have those in place while I’m happily teaching.
As a side note, I’m thoroughly exhausted after my first full day of teaching. After sitting on my butt for 5 months, and going straight to teaching and supervising students for 7 hours, I’ve got some endurance to build up. I fell asleep on the couch at 7:30 p.m. and woke up 2 hours later to write this. Anything worthwhile is going to take all of us to dig deep.
Tuesday, Sept. 15, 2020
This is a short post. It was an up day for my account and I didn’t try to swing/day trade anything.
I was tempted though. I have an idea on how to do some trading during my lunch time. I’m going to use my laptop to look at charts because I really hate using my phone to analyze stocks and/or trade them. But I had left my computer at home so I was trying to see how the market was doing on a 5 minute chart.
I had to bring myself back to reality. My account was up so I wasn’t worried about anything going too badly the rest of the day. Plus I have those stop orders just in case things did go very badly quickly. I’m still setting up my classroom to accommodate this COVID-19 event, so I forced myself to concentrate on my room today. I figured if I got it all set up, then I would be able to focus on trading during lunch on other days.
My account was up .4% for the day. I’m so light in stocks right now that I can’t help wonder how much it would’ve gone up if I was more invested. But the market is so volatile, that missing a bigger up day is better than feeling the full effect of a big down day. And so I practice patience. And I put my laptop by the back door to take to school tomorrow.
Wednesday, Sept. 16, 2020
Today I am glad that I am light in the market. I didn’t like the loss, -.76, but I was glad it wasn’t worse if I had been more invested. Yet, I still put in a couple of order tonight and I will see if they get filled. I put in an order for Chipotle (CMG). The after hours market price has gone up for it, but that doesn’t always guarantee it will stay up. I also put in a stop on quote order for Best Buy (BBY). I’m treating it as a swing trade, just seeing if I can gain a little profit from it. It’s been forming a short consolidation, emphasizing short as it’s not a proper base. It closed at $107.08 and now it’s up to $108.07. I only want to buy it if it continues to go up so I entered the price of $108.25. Maybe I can’t stand not buying a little of something.
Thursday, Sept. 17, 2020
The market gapped down at the opening. My stop on quote order on Best Buy expired at the end of the day because it never reached $108.25. Chipotle was a market order and I got the opening market order price, which simulated the market. It had gapped down to $1240 which was what I ended up paying for it, but it closed at $1225. Then I looked at the relative strength line. It’s going down. I distinctly remember my father asking why I bought CMG back in March when it looked like a good deal at $750. The market was tanking, and it’s relative strength line was going down. I seemed to not pay attention to those big details at the time.
Anyway, I just put in a stop loss order of $1202, giving me a 3% loss if it goes lower.
My previous AAPL stop loss order triggered today too. Now I am 75% in cash. I will sell more stock if the market goes lower tomorrow. I want to make a lot of money when it finally settles down and starts back up.
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