Reason For My Flip Flop

As soon as I put my trade through to short SPY, I realized that hedging myself was an emotional decision. I became scared that the market would go down and I let that fear control me rather than logic. I walked away from the computer for a few minutes and thought about my decision. Then I checked the put/call ratio and saw that there was put buying. That cemented my decision to reverse myself. I ate my ten cent loss and covered my short.

I make a living largely on the bad emotional decisions of others, so it might seem odd that I can make the same mistakes. I am just human and that realization allows me to correct myself quickly. I'm just a primate typing on a keyboard that can act emotionally.

8 comments:

nicasurfer said...

nice post. Probabaly the hardest thing to do.

Anonymous said...

SOLD BGP @ 1.04

OL DAWG

Chaos! said...

I follow the CBOE equity put/call. I hasn't shown much urgency through this sell off. Are you seeing urgency elswhere?

Tsachy Mishal said...

The ISE is low, which means put buying

http://www.ise.com/WebForm/viewPage.aspx?categoryId=126

The CBOE was @.93 ( a pretty high reading and coming after 2 days of high readings), when I made my decision. It has come down a little bit on the rally.

Anonymous said...

Can I ask where you trade and the type of account you have? I have a Fidelity account. They say I cant daytrade like you guys unless I get a margin account? Every trade I make takes 3 days to clear or I violate a good trade clause.

Tsachy Mishal said...

I trade at Schwab in a margin account.

PJ said...

anon - get a margin account, it's easy. You don't have to use the margin except to tide over your trades till settlement.

Random Thoughts said...

i trade with fidelity, its not a problem to trade this way. It does take 3 days to settle but who cares. just go to Accounts and trade->portfolio->click on your trading account->positions.

there you can see at the bottom what is opened/settled and your account balance

yea and dont use the cash account, use the margin account, they dont charge u till trade settles and you are in the red