WTF Wednesday

So, even though its a day late I just have to address Wednesday's action. On top of it being one of the worst personal days of my life, the market didn't treat me much better. I got whipsawed all over the place. I was back at near all time highs in my account only to end the day lower than before with my biggest single day loss from being back and one of the lowest levels in my account since the first week.

This did not make sense, everything I have done up until this point to avoid this did not work, diversification, with puts and calls, position sizing, etc just seemed to do nothing. I had a +8% gain in the beginning of the day, and ended up -8%.

How was this possible? Well we had tame inflation data so we rallied, as was expected, everything was good, however my put plays were all violating their trends with strength. So i cut them loose at just over my 2% loss limit around the middle of the day. With about 1 hour left to go all stocks reversed course. my puts on POT ended up back even however, the other two held up so I was right to sell. All my call positions lost all their earlier gains and then some lost even more than the day before. EWZ reversed course from a 1% gain to a 1% loss in an hour. V acted the same, FSLR was up 13 at one point to only end up 3 by day's end, etc.

This was one of the most demoralizing days because I felt like nothing could have prevented this regardless of how well I was setup, I felt like there was no skill involved whatsoever and I am just 100% at the mercy of the market.

Someone on another blog boasted that he had sold earlier in the day because he had an "inkling" this would happen. Basically, what I said was that was complete luck because he could not have predicted it, just like no one else could have who had similar days to myself. What it came down to was he said he was being paranoid, but had 100% gains in his positions. I told him that is great and if I was in his position I likely would have sold as well but nothing I had was at 100%, at most it was up 30% and I wasn't going to trade to take 30% gains and losses, that wouldn't be following my rules or smart. I could just not trade and save the commissions.

In the end, I had to say "oh well" move on and know that I followed my rules and cut my losses short and let my winners go which is how you will be profitable in the long run.