[catsrevenge]

Most recently purchased 20,000 shares of General Electric (GE) at $17.44. Got caught holding overnight, and the next day was their day to report quarterly earnings. Coupled with the foreclosure debacle, GE Q3 earnings coming in under and the DOW misbehaving that day, the GE stock tumbled well below $16.00 now leaving me somewhere in the negative $28,000 area. The question I now ask myself... Should I sell at a loss and move forward? How long will it take for GE to bounce back to around $17.44 from around $16 and change? Also, half the stock was purchased on Margin from TD Ameritrade. So there is about $35 per day in interest adding up. Any ideas from anyone? what would you do?
Chris/NJ

[SIUYA]

the first cut is always the cheapest

[Tams]

#1 priority in trading --- protect your capital

ie.
if you planned to hold, hold.
if it hurts, cut.
if it hurts and you hold, you are not trading, you are hoping.
and hope is the biggest enemy of success in trading.

[cuttshot]

Chris,

I would take a step back and analyze what was it that made you purchase the shares in the first place. Was it fundamental reasoning? Technically based? Once that is determined then you can decide if anything has changed now that this news is out. How long were you planning on holding the position? If you are still bullish on the position then hold it. If things have changed exit the position and move on to the next trade.

More so than the above info, you really want to have a game plan in place before getting into a trade. I personally don't trade around earnings releases because of the increased risk. The company could come out with terrible earnings and the stock could pop or the flipside as well. You will also want to have some type of target/stop in place before getting in. One of the biggest mistakes traders make is not having a plan before getting in. By not doing this you let emotions get in the way just like you are experiencing now. In your example if your stop was hit get out and move on. If GE begins to rebound then look to get back in.

Don't let this losing trade turn into a disaster. Live to fight another day. On the next trade make sure you have all this planned out before getting in. Hope this helps.

[MightyMouse]

Based on your statements, it seems that your trade was supposed to end before the market closed. SO DUMP IT. You made a mistake. Move on. If you can't stand losing, go see a psychologist. Don't let your account bare the burden of your short comings.

[MadMarketScientist]

I can't tell you how often my "hope" has just ended up losing me even more money. Seems when you really are looking to "just get even" or "bailed out" the opposite will happen.....


MMS

[Kiwi]

Originally Posted by MadMarketScientist »

I can't tell you how often my "hope" has just ended up losing me even more money. Seems when you really are looking to "just get even" or "bailed out" the opposite will happen.....


MMS

Like so many situations in trading the worst thing is if you do the wrong thing then apply hope and it actually comes out profitable.

What just happened has strengthened a dysfunctional behaviour and you will play the same sequence out again and again until you've finally convinced yourself to stop playing to hope (lost enough money).

I can't count the number of times I got away with something - only to lose everything I gained and more over the next 10 or 20 trades.

[wwalker126]

First things first. You should never place a trade without a known strategy for that trade. Meaning, before you click to place that trade order you should already know answers to 2 important questions. 1) What's signaling you to make this trade at a specific entry point? 2) What predetermined criteria must happen to signal your exit point? As a result, you should have an idea of when to enter and when to exit. It seems as if you didn't have a strategy going into this trade, so I suggest take the lost, learn from your mistakes and try not to let it happen again. Good luck on your next trade!