End of Day Journal (2-18-2010)

Comments:

Urgh... a lot of frustration today.

I am off of the strategy already. I blame it on the low volumes on both of these positions - I am not use to seeing such a wide spread in the bid/ask and the < 1000 shares/10 minute bar trade action.  I just couldn't bring myself to sell on SORL. The same for ICXT - but I have until tomorrow.

A lot of things go into a decision to sell. The big obstacle for me today was that SORL was going down, there was a 4 to 5 tick spread, 100 shares sitting on the bid side - and a 7 or 8 tick gap on the first ask differential. I need to sell 902 shares. My stomach can handle a situation like this if the stock is going up - but I don't like sitting on the ask on a downward move - rea-djustments on a pending at $10 commissions doesn't help.

Who is buying/selling 100 share lots? On such low volume stocks it seems that there is a lot of room for market manipulation... conspiracy!! Heh. Crazy mental games.

I appreciated Dr. Steenberger's thoughts on stop-losses the other day. Everyone has a stop loss - explicit and based on market action, or undefined and based on emotional response. Explicit is good. My current strategy includes a stop-loss based on time (per the statistical analysis). Yay! But how could I have expected the situation I was in yesterday - and what to do in those situations?  My analysis did not look at liquidity (well, I tried to, in terms of daily and 30-day MA volumes, but everything washed out).

Part of me, the part that is scribbling all of this down - is trying to understand my own thought patterns The fact is, I have no idea what will happen with these stocks. All of the statistical analysis says that for the stocks that pass the screener I have set up, I should sell after Day 1. If I don't then I am moving into the 'unknown'. So I should sell. Why didn't I?

Because I was looking at a certain loss on the account, and there was a good chance that liquidating the position in this kind of a market would lead to an increased loss, especially in today's opening minutes - where SORL saw a >$0.30 drop in price. So I held on, and the position closed $0.01 higher for day.

It is one thing to decide to sell, and another to actually conduct the transaction with that kind of volatility.

Such good intentions with respect to sticking to the strategy, and I didn't today. If January and the first part of February are any indication, chances are that I will regret not having sold.