One of the important aspects of my trading efforts is the time spent evaluating trade performance. This is not an exercise in coulda, woulda, shoulda – but more along the lines of looking for ways to improve in all areas.
One of the trades that I have been evaluating today is a short position in SPRD (Spreadtrum Communications Inc.) this week. The stock was sold hard on 2/29 and has continued a down move today. I was short some of the move yesterday and held the position overnight. Here is a Weekly chart:
Coming into this morning, I only had one goal and that was to watch the pre-market action. I came very close to covering near the 13.75 level but decided to just put in a stop at the open and let it work.
The position eventually did hit the trail stop but I continued to watch the action. A second push down has the stock under the 13.50 level. In my review of the trade, I am not sure that I would change anything in the exit strategy – but it never feels good to watch a stock continue in the direction where you had your bet placed without you.
So what did I LEARN? The simple take away is this:
Trade the plan. Stick to it, execute it. When the position is closed, evaluate it. If there are improvements to make, make them. Then, go get ready for the next trade.