This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

When the **** Hits the Fan

I got stopped out of part of one position. That's forgivable, however it made me rethink how I use stops.

If I had it to do all over again, I would have purchased more -- a lot more -- on the crash. If nothing else, it had the makings of an excellent day or swing trade. Instead, I sold all of my call options for a loss and some of the stock that did not get stopped out for a gain (my cost basis was around $280).

I should have doubled down.

First, there was no way the drop was the function of a "normal" market. Second, the reasons some folks gave for the selloff -- such as the rumor Steve Jobs was in the hospital -- were little more than short-term noise.

As much as I worry about Apple in a post-Steve Jobs world (that, along with post- flash crash jitters and other factors prompted me to sell AAPL prematurely in March), I knew, with hindsight as my guide, that the stock would recover if not immediately, over the next few trading sessions.

But this clear-thinking logic did not come through when I panicked. That was a setback during a time when I thought I had experienced enough market hysteria to react to it with clarity, not a hasty, anxiety-fueled decision.

In this case, there was no reason for AAPL to plummet. And if one existed, it wasn't good enough to warrant even partial liquidation. In that moment, however, I do not think I had much, if any, control over my actions.

Flip ahead to the summer of 2011, particularly August. We experienced considerable volatility.

Recall the PowerShares QQQ Trust (QQQ) ending July at $58.00, only to tank by as much as 14% over the first nine days of August.

During this period, I bought stocks, particularly media and telecommunications names.

I remember reading reports from loads of folks who sold in a panic. Of course, it helps to have had more time to react than you do during a flash crash, but it takes control and discipline to not only stay the course, but double down.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SBUX $57.36 0.00%
AAPL $93.64 0.00%
FB $118.57 0.00%
GOOG $698.21 0.00%
TSLA $241.80 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs