I was up $5k after holding CVX for less than 1 week (+3% return on the position). I let the profit ride because the stock was acting right. Now I rode the position into paper loss due to the overall market pullback. Is drawdown inevitable if you want to be a pig for position trading?
My friend. Look at the chart for CVX and let it be your guide. Your problem is that your mistaking a natural pullback for something negative. Stocks dont move up in straight lines. http://stockcharts.com/h-sc/ui?s=CVX&p=D&b=5&g=0&id=p04472986603 Here are the facts: - It was high above the top bollinger band after nearly 5 days of going up then it pulled back to the 20 day moving average. - The stock has pulled back now, which is natural, to the 20 day moving average. - The stock closed above its 20 day moving average. - The stock is now down for the last 4 days. Stocks rarely move down more then 4 days in a row and if they do, its a sign of serious problems. Hold onto your pants. The stock isnt done moving up and it will get back to 83. However, should it violate the 20 day moving average then we will have big problems. Last year this made a major correction in May. Should this thing correct then your looking at 70 bucks as the bottom. Dont panic just yet, it didnt violate the 20 day. It will move back up.
I have not looked how much it is down from the recent peak but if you are in a position/long term trade you should be able to live with minor fluctuations in the position. If a small swing in percentage terms is disturbing you your size might be to big. reevaluate the position and ask yourself if the reasons you first took the trade are still valid. If they are hold or cut back the size until you are comfortable with it. You could also sell short term calls against the position and use the prem to buy OTM puts to give the yourself a hard stop loss point that you could live with. This all depends on how long you were planning to hold and what your objectives for the trade were. AAA30
Thats right. No one really uses such things as Bollingers or moving averages. Those are outmoded and indicators like on-balance volume that have been around since the 60s have no use anymore. Guys like Chaikan and Bollinger really wasted their time with such laughable theories. We all just hop on a popular stock that Jim Cramer mentions on the show, hold for a while and hope for the best. Thats the only way to trade. Right?
I never let my winners turn into losers, no matter what. If I have to sell to break even I will do that.
I would like to tell you that this is the smartest thing i read here in a while but i am afraid you have been sarcastic.
Strictly a timing issue. I don't know your timeframe to justify the definition for position trader.Sounds like you entered late for a swing trade now it's a position trade waiting for the passage of retracement. CVX displays the same characteristics repeatedly. Specifically the past two years. Same patterns, strike angle and time line over and over. Call it the instruments heart beat, vibration, harmonic...whatever. It's telling you what it's gonna do. At any rate, news: http://biz.yahoo.com/ap/070525/chevron_divestiture.html?.v=1 AP Chevron Sell Fuels Marketing Business Friday May 25, 8:16 am ET Chevron Units in Europe Sell Fuels Marketing Business for $460M SAN RAMON, Calif. (AP) -- Shares of Chevron Corp. edged up in premarket activity Friday, a day after the energy company said its European subsidiaries agreed to sell their fuels marketing business to Delek Benelux BV for $460 million. ADVERTISEMENT Under the agreement, the Dutch company will buy 803 Texaco-branded service stations, two fuel terminals in Belgium and Luxembourg, interests in six joint venture retailers in the Netherlands, and related assets. Chevron's subsidiaries in Belgium, the Netherlands and Luxembourg agreed to the sale with Delek, which itself is a subsidiary of Israeli company Delek Petroleum. The deal is expected to close during the third quarter, and the sale price is exclusive of a working capital adjustment estimated to be between $30 million and $95 million. Chevron said it will retain its lubricants, aviation, fuel and marine marketing, Oronite additives and upstream businesses in Europe. Shares of Chevron added 3 cents in premarket trading to $80 after closing Thursday at $79.97.