Greetings from Bermuda!
As you can tell from the title of this post, I wanted to say something about someone who really pissed me off today………….me! Let’s start with this minute bar chart of SLV:
So what’s this all about? It’s simple. (Maxx2000, please avert your eyes). I took on a long position in SLV during the morning mayhem, and I set a stop just below the prior day’s low: $28.20. Take a wild guess what the low for the day was? Yep! $28.20 precisely, so I instantly lot a bunch of cash, which was immediately followed by a big rally!
The next is even more painful……….the palladium ETF symbol PAAL.
Same story, but worse! I set a similar stop-loss, and the price raced down to PRECISELY my level, stopped me out, and went blasting higher again.
I lost a bunch of cash in almost the same way on two separate metals positions.
Several lessons:
- It isn’t a great idea to be placing big trades while squished into an airplane;
- It’s pretty dumb to actively trade on a day when all holy hell is breaking loose;
- Although I’ve never really signed up to the contrarian fears that folks are “gunning for your stops“, I’m actually starting to believe this is true. At a minimum, setting tight, super-obvious stops isn’t a good idea.
Sheesh. what a dope!
