Wednesday, February 25, 2015

After hours trading summary


Today was a good day; a 10% return day. I bought UWTI at $2.89 this morning and sold it close to todays high at $3.20. Yesterday morning I wrote the following in my post:
 “However, according to my model of oil, we should see USO hitting $18.60 this week at one point. This means UWTI should be back around $3.20 at one point. “
It happened to be extremely precise as of today.

However, I’m not writing that to brag about it, but to expose a mistake I did yesterday. I jumped in UWTI Monday at $2.85. At that moment, my analysis for USO that I published Tuesday was already complete. But instead of simply respecting my plan – which was to exit at $3.20 – I tried to be greedy. Yes, experienced or not, greed can cloud our vision. And so I went through the trouble of the following transactions:

2015-02-23 Long UWTI $2.85 2015-02-24 $3.00 5.26% $526.32 
2015-02-24 Long UWTI $3.00 2015-02-24 $2.89 -3.67% -$366.67 
2015-02-24 Long UWTI $2.89 2015-02-24 $3.20 10.73% $1,072.66 

When I could have simply kept my initial trade at $2.85 open for two days and achieve the same results. A lesson that I should learn again; if you trust your plan, stick to it.

Some of you might still be in UWTI and wondering why I got out. According to my probabilistic model for USO, the new probabilities are:

 P(USO>18.65)= 81.25%
 P(USO<18.65)= 18.75%

Which are still good odds, but I think there is better opportunity elsewhere for trading (I specified this because as an investment USO might be one of the best).


How was your day?

1 comment:

  1. I got in NUGT at 14.04 and exited at 14.63...missed the top but that isn't what I ever expect to achieve. I'm curious about your next POA

    ReplyDelete

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