I am mightily irked at myself right now, but I’ll make this into a teachable moment.
I short stocks (as most of you know), and I keep a lovingly-maintained stop-loss order on every single one of them, without fail. Before the market opens each morning, I pause every single one of them, and I wait a minute or two before reactivating those orders. And let me give you a perfect example as to why I do this:
What you see above is the symbol VC this morning. When it opened, it absolutely exploded higher, and within milliseconds, it returned to its original level.
Want to guess who got stopped out on that spike? Me.
Want to know why? Because I didn’t pause my orders like I usually do!
I can offer no good excuse for failing to pause my orders. I was just being distracted and slipshod. And it cost me $700 instantly.
I don’t know where these weird spikes come, and frankly, it doesn’t even matter. The fact is that they do happen, and one should shield themselves from the first few seconds of weirdness and shenanigans that take place at the opening bell. I usually do, and I didn’t, and I’m regretting it.
