Wednesday, March 11, 2009

Ride the FAZ

During a break at work this morning, I check out Stewie's blog to see what's new. He had just put in a post that states that FAZ and SKF are in good, short-term positions for the upside. I check it out and figure I could tell what he was talking about.

Looking at the 5-day, I see FAZ is bouncing off a lower channel and the overall rally is expected to be short. Price action was showing a swift turnaround from the opening activity, and it looked promising.

I jumped in at 54.69 and watched it rocket up to about 60. I needed it to get to above 64 to make back my losses from Monday, but I was still willing to take what I could off the table. However, I instead hung on to see if it would go higher and had to get back to work. When I got the chance to look back at it, the price had plummeted back down to 55. I watched to price go back up and down two more times, each time considering that I should jump off near 60. But I kept waiting, hoping, actually, for it to cross 60 and shoot up even further.

I watched the prices at the end of the day to see which way they would go. They're moving in the right direction, so I decided to hold overnight. Very, VERY risky with a 3x short ETF! But looking at the long-term charts, and figuring that the bear rally may be over after tomorrow, I figure that the risk is reduced. Aftermarket action climbed up, too. I may be in the money right now, but it could always gap down tomorrow and fall away. Keep the finger on the trigger.

To the experienced day-trader, these are all probably horrific, newbie mistakes. Let me just say that the worse part is not my inexperience, but that I have to limit my trading severely because of my job. With patience and better stops, I expect to find a balance and routine into a part-time trading schedule.

That's also why I have this blog. I don't care if nobody ever reads it, because it will be here for me to look back and study my own mistakes.

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