Satuki @ Home

What a drop! I have not seen this kind of drop for a while. This is the kind of days all traders like you and me want to see. If you stayed on the right side and held onto your positions you’d make a killing. Today’s drop was caused by many reasons such as

• Treasury Secretary Timothy Geithner did not address exactly how the government will spend the rescue funds.
• The Old bulls took profits
• The Bears came back with a vengeance

I think the first reason is the least important. That was just a trigger. Reason 2 and 3 are why the market plummeted.

I had 6 swing long positions and reduced them to 2 yesterday. I also went long on SRS today. It is not hard to see a baby bear crept into my mind.

As for my day trading today, I took one long trade in SRS @54.78, an inverse fund that goes up when the market goes down. So if you go long on it, it is like shorting the market.I ended up break-even (a tiny loss if the commission is included)in the SRS trade. My entry was almost close to perfect. Right after I entered it, it spiked to 56.60. I was talking to someone on Twitter. My first target for SRS was 57.00. After the spike, I moved my stop loss quickly to the break even point. I would never let a position that is up 4-5% turn into a loser. It retraced and took out my stop loss. With gut-wrenching pains, I watched it climb all the way to 62+ subsequently.

Did I do anything wrong in this trade? I totally stuck to my game plan. That was to trigger my trailing stop when it hit 57. What if I did not move my stop loss so quickly? What if I just closed my position during the first spike? What do you guys think? How would you take on this trade if you had the same entry as mine?

For swing trading, if you did not enter any short positions today, do not chase it. We might have another chance. Neither am I going to open any swing longs from here.