What went wrong??????
That is the big question and it is probably the least significant answer too. Why? Because it does not matter why something moved in one direction or the other, it only matters that you failed to plan for either case. And that is truly what went wrong. It does not matter that the Dow, the Nasdaq, the dollar, or whatever influenced the trade one way or the other. It only matters that I did not plan for that and so I am now stuck in a trade where I have to wait much longer that I wanted to, to be profitable.
What could I have done differently?
The answer is HEDGEING.
I bought in at $1.24 which was perfect. The problem is I then bought in again at $1.38 and $1.41 for longs. If you look at the chart above I marked a green dot for long and a red dot for short. Instead of longing in two more times, I should have waited until the hour before trading was opening and opened a short position. In this way, had the it gone the direction I thought it was going to, I would have lost a small amount on a short but gained significantly on my long to more than cover any loss. However when it did what it did yesterday, I would have still made out like a bandit and not be writing a post mortem on what I did wrong, because I would not have cared :)
Such is life. Experience is the best teacher and you can best believe I will not be making this mistake again in the future.
I only have one open trade at the moment (can you guess what it is?). I think today could be a bad day on for markets in general as there are some rumblings in the REPO (Repurchase Agreement) market again, this time they went negative. This has me sitting on the sidelines looking for good deals. If there is blood in the streets, then that is the time to buy. I’ll make an update if I find something. Otherwise I’ll post it tomorrow.