Learning from mistakes(5/21)

5/18.

bad trading between 5/8-5/16. naz dropped 8 days in a row from 2350-2165, dow dropped from 11650 to 10650

good play: sold all before fed announcement and when rsi of dow reached 80

bad: still lose a lot to catch falling knife.

lesson: 1. no buy before index's rsi reach20,

            2.no buy before you see a final hour reversal

          3. use small ammount, no trading, or sell short

           4. no matter how hot it is, when media report it everyday, it is near the top. oil 72 in 9/05, gold 735 in 5/06. the best trading is: do opposite: sell short

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1. never daytrading with daytrade margin

lost 80k in 15 min with goog/aapl/sndk....(feb/2006). goog warning growth slowdown in confference meeting, dropped from 394 to 340 in 15 min....

reason: didn't check the meeting date, made decision without early DD

2. never timing the mkt with seasonal effect(summer rally or January effect)

a. Lost 170k from 6/31/2004-8/15/2004 when naz was in big correction(summer rally when rsi of naz already near 80 ??? stupid ...........)

b. lost 120k in 2 days at the begining of 2005 (jan effect with so high rsi, hopeless....)

reason: when weekly rsi of naz/dow reached 80, mkt always followed with a 3-6 months correction.

3. sell too early in strong stocks such as tie near 30 (went to 94 in 6 months), hans, near 50 (went to 204 in next 9 months), ntri near 43 (to 76 in 4 weeks)

 reason: too chicken when a strong stock breakout a 3-6 months consolidation base, usually those high growth/samll cap can long another 3-6 months. use weekly chart to calculate the traget (2x base high)

4. never bet ers (after lost near 200k, no this problem now)

5.becareful with tax selling in dec (lost total 160k between 2001-2003, okay now)

Fortunately, every loss came back with nice interest...

best return record: 100k to 540k in 7 months.

always take out some cash when you made a lot in mkt...