Trader Mom @ Home

A lot of stocks have doubled from their lows since Dow touched its low in March 2009.  People like bottom fishing.  Bottom fishing is very dangerous. Because it is dangerous, it normally gives you a very good reward.  So I believe that many people have made some decent profits during this rally.  This type of rally is not going to sustain for too long.  A few sector leaders are showing topping signs.  If you have made decent gains, your primary goal right now is to try the best you can to hold onto your gains.  Holding onto your profits is perhaps  harder than you think because your itchy trigger finger will keep you in the game. Here are 3 things that might help you to do that.

1: Open a new position only when your set-up is impeccable
2: Lighten your load
3: keep a tight stop loss

You really do not have to be in the market 24/7.  Give your profits and money a good rest.  It will work better for you in the future.

Although I have not made any money in June, I have managed to stay above the water for the time being.  Today, I could have traded BIDU better.  BIDU started dropping when it was up 1% in the morning.  It ended up -3.51% for the day. The whole trading range was around 5%. if we cut off the top and the bottom,  it still had 3% left for us to catch. Nevertheless, I was jumping in and out of it so much that I left some money on the table.  And I should have pounded it with some size.  But I am a pround one lot trader.  LOL!

I have been getting in and out of my positions quickly.   It is not because I have been scalping. I get out of a position immediately when I sense even a little bit of danger.   You have to love it when you pay just 2 dollars for a round trip of 100 shares BIDU or GOOG.   100 Shares of BIDU is worth 30k now.  If it moves 1.5%, that is 450 dollars. If it moves 2%, it is 600 dollars.   By quickly jumping in and out of, I want to catch a move like that with minimum risk.  The super low commission affords me to do that.

I also traded CYOU today.  That was one disgusting stock with some disgusting spread.   Due to the spread, I did not set a stop loss and started with shorting only 100 shares.  And it moved against me immediately.   Because of the wide spread, I said to myself that I would cover it when it fell back a bit and it never fell back until it hit 44+.   Good thing was that I shorted only 100 shares at 41.91 and I shorted another 200 @ 44.17, which helped me control the damage a bit.

I am used to trading very liquid and tight stocks like RIMM, APPL, POT or GS.  Some people are good at trading this type of small cap stocks that have wide spread.  How do you handle a stock like CYOU?