The Babe's Trades

[riverbabe]

Currently holding

long
NEON @ 5.90
NUAN @ 25.94
AMLN added some today @ av. 26.95
AMRN added some last week @ av. 11.45
ARNA bot today @ 9.91

short PNRA @ 159.01
short CHK @ 16.85

[riverbabe]

Currently holding

long
NEON @ 5.90
NUAN @ 25.94
AMLN added some today @ av. 26.95
AMRN added some last week @ av. 11.45
ARNA bot today @ 9.91

short PNRA @ 159.01
short CHK @ 16.85

Sold ARNA @ 10.16, +2.46%
Sold AMRN @ 12.62, +10.1%
Covered 1/2 PNRA @ 149.75, +5.8%
Covered CHK @ 18.83, -10.5%

[Deaddog]

Sold ARNA @ 10.16, +2.46%
Sold AMRN @ 12.62, +10.1%
Covered 1/2 PNRA @ 149.75, +5.8%
Covered CHK @ 18.83, -10.5%

Any reason behind this flurry of activity?

I'm seeing a pattern of small wins and big losses.

Do you go into a trade with a plan. I know you mentioned mental stops but how do you handle targets?

[riverbabe]

Any reason behind this flurry of activity?

I'm seeing a pattern of small wins and big losses.

Do you go into a trade with a plan. I know you mentioned mental stops but how do you handle targets?

Got a margin call. Weeded things out. Have targets but not all coming to fruition. Took out the riskier stuff. Left bigger profits on the board.

[Deaddog]

Got a margin call. Weeded things out. Have targets but not all coming to fruition. Took out the riskier stuff. Left bigger profits on the board.

Never had one of those. Does someone actually call or do they just start closing positions?

[riverbabe]

Never had one of those. Does someone actually call or do they just start closing positions?

"They" don't do anything if you cover it. They let me know by email. It was only a couple of hundred dollars. I could have sent them a check from my checking account, or sell some stock, which is what I decided to do.

Actually, with the number of shares in each trade I made, I came out in the green with $$ left to reinvest. I sold AMRN because I had a healthy gain and had held it a long time. The FDA date is in July, so have time to get back in. Lately it's been topping out so decided I can get back in for less if I want to. I had bot ARNA yesterday with FDA date next week. Again, it was looking toppy, as though the decision was built in. Don't want to hold thru the decision, so took one-day profits. I wanted to cover CHK yesterday at -6.5% but didn't have the cash. Same with PNRA.

That about sums it up. No prob. No panic. Just a good exercise in getting rid of risk.

[billyjoe]

River,
It's heck getting old. Everytime you post AMRN I think it is AMLN. Got me twice already today.

----------billy

[riverbabe]

River,
It's heck getting old. Everytime you post AMRN I think it is AMLN. Got me twice already today.

----------billy

Go AMLN! The best offer better be above 30, not less than 27!!!

[Deaddog]

Just a good exercise in getting rid of risk.

Risk control is my favourite topic for discussion. It’s the first question I ask when anyone tries to sell me a stock selection strategy or financial planning. How do you control risk?

Never seem to get a satisfactory answer.

Here are my risk control rules:

Define your risk as the difference between your entry price and your stop.

Never risk more than 1% of your capital on any one trade.

I will hold a maximum of 8 stocks in my portfolio and will not exceed more than 25% of the account value in any one position.

Follow those 3 rules and you will never get a margin call.

[riverbabe]

Risk control is my favourite topic for discussion. It’s the first question I ask when anyone tries to sell me a stock selection strategy or financial planning. How do you control risk?

Never seem to get a satisfactory answer.

Here are my risk control rules:

Define your risk as the difference between your entry price and your stop.

Never risk more than 1% of your capital on any one trade.

I will hold a maximum of 8 stocks in my portfolio and will not exceed more than 25% of the account value in any one position.

Follow those 3 rules and you will never get a margin call.

What I did yesterday was exuberantly buy biotech stocks, without realizing I was using the cash reserve I had put offlimits for buying back my two shorts. Nothing to do with what you're talking about. So I didn't have that reserve to cover the shorts. The margin call was no surprise.

[billyjoe]

Risk control is my favourite topic for discussion. It’s the first question I ask when anyone tries to sell me a stock selection strategy or financial planning. How do you control risk?

Never seem to get a satisfactory answer.

Here are my risk control rules:

Define your risk as the difference between your entry price and your stop.

Never risk more than 1% of your capital on any one trade.

I will hold a maximum of 8 stocks in my portfolio and will not exceed more than 25% of the account value in any one position.

Follow those 3 rules and you will never get a margin call.

Deaddog,
I'd drive you crazy but I'm getting more conservative with age. At one time 50% of my capital was in one stock. I thought "this is crazy" so I sold 80% of it. The stock was AAPL , that was nearly 300 points ago. Still have 15 stocks with a core of 4 that comprise 55% of the total. Reinvesting divs. is a big part of the current plan. It works real well in down years and none of the companies have lowered return or are in distress. And I don't short.

----------------billy

[riverbabe]

Sold ARNA @ 10.16, +2.46%
Sold AMRN @ 12.62, +10.1%
Covered 1/2 PNRA @ 149.75, +5.8%
Covered CHK @ 18.83, -10.5%

Dodged the ARNA downside freight train this AM! All the stops got taken out. One reason I use mental stops, not solid ones.

[Deaddog]

Dodged the ARNA downside freight train this AM! All the stops got taken out. One reason I use mental stops, not solid ones.

I gotta agree with you on that. Do you have a process in place on how to deal with a stock that violates your mental stop?

[riverbabe]

I gotta agree with you on that. Do you have a process in place on how to deal with a stock that violates your mental stop?

Of course I do! I use the close pps and read the chart and make a decision. Sell next day if bad candles. Or, if market takes it positive next day, hang on a little and "hope and pray" for a better sell price. Keep watching chart. And try not to cringe when DD yells at me.

[Deaddog]

Of course I do! I use the close pps and read the chart and make a decision. Sell next day if bad candles. Or, if market takes it positive next day, hang on a little and "hope and pray" for a better sell price. Keep watching chart. And try not to cringe when DD yells at me.

Didn’t mean to come across as if I were yelling. Sorry about that. God I hate to see you cringe.

With a stock like ARNA I would probably still be holding.

My process when my mental stop is hit is:

Don’t do anything for at least 10 minutes.

Place a hard stop under the low. ($7.75)

If the price recovers; keep moving stop up below swing lows. ($9.00 then 9.25)

I’ll keep moving the stop up until I get to my mental stop and then I’ll make it a hard stop.

Hope and Pray it keeps going up. But I now have a hard stop in place. No more emotion involved.