Sorry, I'm behind on blogging... So as you know I bought a puny amount of FAS at $12.55. It's probably a good thing my mistake happened, since FAS has since plummeted.
When I realized my mistake, I removed my stop, because I didn't want to pay commissions on such a small trade... I didn't really care what happened with it.
Then yesterday with the markets way down in the morning, I bought a proper amount of FAS at $10.01. I set a stop at $8.50 (for a max 15% loss). I thought this was a steal of a deal and was expecting a rally since it was Obama's inaugaration day. But FAS easily hit my stop and plummeted to $7.60, and incredible 40% drop from the previous day's close! It's still hard to believe these 3x ETFs... 40% in one day -- amazing.
Anyway, so I'm feeling pretty crappy about that trade, but still felt there's got to be a rebound here with such large drops. So today, with the markets up, I waited for the first sign of a rally in the afternoon, and I bought in again, getting in around $8.50 -- basically where I previously exited. It was a pretty bad price since it was much lower earlier in the day. But the rally was strong to the close, and FAS finished at 9.90.
It's nice it finished so strong, so that now I can put a stop just above my entry point and not lose any more.
Man, I think it's a little too stressful to trade FAS/FAZ -- you practically need to be a day trader.
Wednesday, January 21, 2009
Thursday, January 15, 2009
Trade Update - FAS
Okay, I'm stupid...
I planned to buy FAS (3x bull financials) to catch a short rebound, since the markets have been mostly down the last 5 days in a row including being down sharply (3%) this morning.
I bought almost perfectly at the bottom at 12.55 before lunch and it immediately shot up to $15.00 before I realized my mistake: I was in such a hurry, I entered 1/10th the number of shares I meant to (because I was used to buying SKF which is in the $100's, not the $10's), so I ended up hardly owning anything. I can't make enough on this to even cover the commissions now, so I'm not sure what to do. I'll probably just wait till tomorrow to see. I think it's too risky to buy right now. If the markets drop again, I'll try to get into it again in the $12 range, this time with a proper number of shares, but I'm probably too late. Bah - so much for my perfect trade.
Lesson: Always review the trade confirmation page to make sure the total order amount makes sense before you click OK.
I planned to buy FAS (3x bull financials) to catch a short rebound, since the markets have been mostly down the last 5 days in a row including being down sharply (3%) this morning.
I bought almost perfectly at the bottom at 12.55 before lunch and it immediately shot up to $15.00 before I realized my mistake: I was in such a hurry, I entered 1/10th the number of shares I meant to (because I was used to buying SKF which is in the $100's, not the $10's), so I ended up hardly owning anything. I can't make enough on this to even cover the commissions now, so I'm not sure what to do. I'll probably just wait till tomorrow to see. I think it's too risky to buy right now. If the markets drop again, I'll try to get into it again in the $12 range, this time with a proper number of shares, but I'm probably too late. Bah - so much for my perfect trade.
Lesson: Always review the trade confirmation page to make sure the total order amount makes sense before you click OK.
Wednesday, January 14, 2009
Trade Update - SKF
I stuck with the plan and sold my SKF today at 138.10 (bought at 106), for a nice 30% gain in about 5 weeks.
Friday, January 2, 2009
Oil up
Oil closed up at $46 today, probably mainly due to the conflict in the Gaza strip. More details here.
In the last 5 days DXO has gone from $2.20 to $3.13 -- up over 50%! It just goes to show how much money could be made or lost with this ETN depending on your timing.
It looks like the Palestinian conflict could get worse, meaning oil could climb more. If oil gets above $55, I may sell off half of my DXO. Why? Well, while I still believe oil will go much higher long-term, I had obviously underestimated how much the economic downturn would affect it in the shorter term and how low it could go. If the current price is just being propped up by the recent conflict, it may be prudent to sell off some while it's high in order to be able to buy back in at a lower price. Also, I've got too much of my portfolio weighted in it right now since I kept averaging down as it dropped lower.
In the last 5 days DXO has gone from $2.20 to $3.13 -- up over 50%! It just goes to show how much money could be made or lost with this ETN depending on your timing.
It looks like the Palestinian conflict could get worse, meaning oil could climb more. If oil gets above $55, I may sell off half of my DXO. Why? Well, while I still believe oil will go much higher long-term, I had obviously underestimated how much the economic downturn would affect it in the shorter term and how low it could go. If the current price is just being propped up by the recent conflict, it may be prudent to sell off some while it's high in order to be able to buy back in at a lower price. Also, I've got too much of my portfolio weighted in it right now since I kept averaging down as it dropped lower.
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