Lost $1600 in one day trading OZL

[MichaelD]

Funnily enough it was the first time I had not used a stop loss, and sadly enough it was on the advice of another trader that I didn't (his suggestion was not to use one as I kept getting stopped out due to the volatility of silver).

Please don't use the word "trader" to describe this person. They are not a trader.

 

[master82]

The reason I chose to trade this stock was that I bought 10,000 OZL 3 weeks ago at $1.68 and sold it at 1.84 on 25/8/08 before it started to plunge back, so this time I wanted to do the same trick again but got burnt - it dropped to a new low of $1.48 - god knows how long it will stay there.

 

[skyQuake]

OZL yesterday's close was $1.635 , but today it opened at $1.51 with today's high at $1.54 and low at $1.48.

I thought yesterday I bought at a good price at $1.65 cuz its 52 weeks was $1.63, obviously I got it very wrong

If its better to buy at a 'cheap' low price, then by logical progression, the best price is at $0 when the company goes bankrupt. Just think about all those mum and dad investors that were mesmerized by t1, bought in at t2 and continued to buy all the way down...

 

[CanOz]

Heres my worst experience....about a year and a half ago.

What i'm about to share with you, i do so only as a warning to others trading CFD's.

Today i wanted to go short on Copper (may07). I've been trading gold and oil recently on support and resistance, with some minor success. The contracts were all minis. I looked at the chart, and thought this looks like a nice safe spot to enter and it looked like it was slowly breaking down. I put in my order for 5 (yes 5 contracts), thinking it was a mini .

Immediately i realised my mistake, too late, the spread took 1500.00 right away. I thought, oh my god.....then i thought...wait, trade it like i planned...be cool, calm. It proceeded to push UP through the channel line over the next two hours and when i finally pulled the pin i lost 6900.00.

So far in my trading over the last couple of years i've never taken a loss like this, they've been much smaller, on shares, using tight stops.

This was a stupid, stupid mistake which i hope non of the other "inexperienced" members here make.

I had no real plan
I did not check out the contract size properly
I took no consideration of risk at all

I was gambling, plain and simple.

CFD's are dangerous....be aware.

Cheers,

https://www.aussiestockforums.com/forums/showthread.php?p=144665#post144665

 

[cutz]

The reason I chose to trade this stock was that I bought 10,000 OZL 3 weeks ago at $1.68 and sold it at 1.84 on 25/8/08 before it started to plunge back, so this time I wanted to do the same trick again but got burnt - it dropped to a new low of $1.48 - god knows how long it will stay there.

This must be common train of thought with beginners. I mainly hold long term blue chips but I had a crack at catching a falling knife recently, made a profit, went in again then the stock went through the floor, should have known better. Don’t feel too bad at least you got out with a small loss.

Cutz.

 

[NotaDuck]

Blogs you said that you use a 5% stop. In this case what is your usual target?

 

[Trembling Hand]

OZL yesterday's close was $1.635 , but today it opened at $1.51 with today's high at $1.54 and low at $1.48.

I thought yesterday I bought at a good price at $1.65 cuz its 52 weeks was $1.63, obviously I got it very wrong

But this is the thing I just don't get. A very quick (1 min) look at the moves of this stock in excel from close to close tell me that the average negative day for the last 2 months is just over -4%.

How can a 7.5% fall be a suprise?? Only 2 weeks ago it fell 9% in one day then two weeks before that 15%.

Whats the point of this thread?? You say the market is to volatile. If you have no skill in judging adverse stock movements no market will suit you.

 

[master82]

But this is the thing I just don't get. A very quick (1 min) look at the moves of this stock in excel from close to close tell me that the average negative day for the last 2 months is just over -4%.

How can a 7.5% fall be a suprise?? Only 2 weeks ago it fell 9% in one day then two weeks before that 15%.

Whats the point of this thread?? You say the market is to volatile. If you have no skill in judging adverse stock movements no market will suit you.

Are you suggesting I should hold the stock? Initially I really wanted to keep it to see how it goes next week, but it dropped to two year low of $1.48 which scared me so I sold off

 

[BentRod]

I sold like any newbies would in panic

all I wanted to do was sell, sell and sell to cut losses

Seems to me you did the right thing, a N00b as you put it, would still be holding.

 

[cutz]

Trembling Hand,

What’s the formula for separating the negative averages from the positive averages in a row of percentages?

Cutz

 

[Trembling Hand]

Are you suggesting I should hold the stock? Initially I really wanted to keep it to see how it goes next week, but it dropped to two year low of $1.48 which scared me so I sold off

NO. What I am saying is that the adverse move that you inflicted on yourself was a completely expected one. Yet you seemed surprised!!

My point is your position was obviously way to large for your account to cause such stress. correct? You have blamed the "volatile market" which is completely incorrect.

Do you know about position sizing?

 

[Julia]

Are you suggesting I should hold the stock? Initially I really wanted to keep it to see how it goes next week, but it dropped to two year low of $1.48 which scared me so I sold off

I wouldn't want to pre-empt TH's reply but I suspect he might have rather been wondering why you'd get into it in the first place, in that it has been in a clear downtrend and trading below the MA for some considerable time.

Might be good to stand aside from the present volatility while your loss is as small as this.

 

[Trembling Hand]

Trembling Hand,

What’s the formula for separating the negative averages from the positive averages in a row of percentages?

Cutz

=IF([CELL]<0,[CELL],0)

Will give you only values that are negative.

 

[Trembling Hand]

Julia that two.

 

[cutz]

Thanks

cutz.

 

[jonojpsg]

TH is spot on - this is all about position sizing. Setting a mandatory stop of 5% basically means if you have all of your capital in one trade then you stand to lose 5% of your capital.

If this fits with your plan then OK, but if you only are prepared to lose the standard noobe 2%, then you need to adjjust according to how much of your capital you are risking.

EG if you put 20% of your capital in a trade, then you can set your stop 10% below buy price as 10% of 20% is 2%. This is pretty much my trading plan, although I have made some huge slip ups by not setting stop losses recently so who am I to talk

 

[master82]

NO. What I am saying is that the adverse move that you inflicted on yourself was a completely expected one. Yet you seemed surprised!!

My point is your position was obviously way to large for your account to cause such stress. correct? You have blamed the "volatile market" which is completely incorrect.

Do you know about position sizing?

The reason I chose to trade this stock was that I bought 10,000 OZL 3 weeks ago at $1.68 and sold it at 1.84 on 25/8/08 before it started to plunge back, so this time I wanted to do the same trick again but got burnt - it dropped to a new low of $1.48 - god knows how long it will stay there.

It was pure speculation like a gamble - I have so much to learn

 

[BentRod]

TH is spot on - this is all about position sizing. Setting a mandatory stop of 5% basically means if you have all of your capital in one trade then you stand to lose 5% of your capital.

You won't last long risking 5% per trade.

I doubt TH would be 'for' risking 5%.

 

[Trembling Hand]

It was pure speculation like a gamble - I have so much to learn

Like money management and position sizing for starters. The R:R. Then trends. But I suspect if you keep "gambling" you will not last long enough to learn.
Anyway....... Good luck.

 

[kam75]

Bought 10000 OZL at 1.65 yesterday, sold today at $1.50 - shocking

I sold like any newbies would in panic - maybe I should just hold OZL and wait for next week, I don't know I just lost control - all I wanted to do was sell, sell and sell to cut losses.

The market is too volatile for the beginers at the moment, I think I should sell my portfolio and sit on the sideline until condition improves.

This stock is entrenched in a raging downtrend since busting support around the $2.50 level - what were you thinking? This dog has a lot further to go till some heavy support, around the 1.00 and then 0.75. Short it.

Regards
kam75
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