Dec 18 2007
I am such a noob
I made a big blunder today. I intended to
1. Buy IWM at $75.50 or lower.
2. Sell IWM if it falls below $75.30.
I can enter these two orders at the same time. Here’s what I actually entered.
1. Buy IWM at $75.50 or lower.
2. Sell IWM at $73.30 or higher. <—Mistake is right here.
So today I was the proud owner of IWM for a grand total of 2 seconds.
You can see that at 9:35:53 the two orders were entered. At 9:36:14, I bought IWM because that’s when someone was willing to sell IWM to me at $73.50, and two seconds later I sold it because the second order was mistakenly entered as a limit sell order at $73.30 rather than a stop loss order at $73.30 as intended. So I got hit on $5 commission twice and 1 cent per share. I feel that this trade would’ve been a brilliant trade, but this is enough stupidity for one day so I will not attempt to buy IWM today. The only consolation I have is that now I know thinkorswim’s platform is fast enough to allow me to make a round-trip trade in 2 seconds.
Note: Times in the picture are PST. Time stamps on blog are EST.
Update after the close: Well, the good news is that I dumped TWM yesterday because the market bounced back. The bad news is precisely that: the market bounced back, I nearly nailed the exact bottom, but I goofed the trade and gave up.
In case things aren’t clear:
TWM is 2x the inverse of the Russell 2000 index.
IWM tracks the Russell 2000 index.
Nailing the bottom is priceless, but fubaring the trade is just lame. I can’t believe I made two trading mistakes in as many number of days. However, I am glad that I didn’t make the mistake of being too greedy and hanging onto TWM. That lesson took me many months to learn. It closed at $72.78 today and I sold it yesterday for $73.90.
I learned the lesson of working hard to get a good entry price. Yesterday I ranted about not getting into TWM at a good price and today I nailed the bottom in IWM. Seriously, how often can you get within 15 cents of the intraday low on a $70 stock? Too bad I goofed the trade and gave up on it.
Woah, you’re becoming a day-trader!!! (don’t approve, just wanted to say that).
The vast majority of comments go through instantly. For some reason your comments always get caught by the filter. That probably won’t happen in the future.