Sell:(SOL)

Today I completed the round-trip journey I began with (SOL) in April. I bought it for $15.25 then, watched it rise to $29.48, and then watched it right back down to $16 where I sold today for about a 5% gain. I can assure you the ride up was more fun than the ride down.

The only review I think that's necessary for this trade, and for (SOHU) which I never posted a review for, is on the sell side. They were both great buys and bad sells.

There is one sell rule I'll incorporate that would've preserved much of my gains in both of these stocks, and that is once the market enters a correction, I will put a 5% trailing stop on any big winners I hold. This will allow them to run if they want to, but protect my profits.

This would've had me out of (SOL) around $22 for about a 45% gain and out of (SOHU) around $75 for about a 15% gain. This compared to 5% and 9% gains respectively is reason enough to employ the strategy. Add on the reduction of risk being in cash and it's clearly a sound rule.

Yes, there will be times when I stop out and the stock powers higher after that. My goal is to book profits on trades, not to ride every stock to it's ultimate peak and sell there. Learned that the hard way recently.

The most important rule is still to invest with the market, and this sell rule incorporates that into my strategy. I'll post my full rule set here in the next day or two.

On a personal note, I'm pretty embarrassed and demoralized by this trade. There's an analogy that I thought of tonight and will use to work past this:

There's a quarterback who's led his team down the field in short time, doing everything right, and positioned them inside the red zone ready to score. Instead he makes a rookie mistake, forces a pass into double coverage, and throws an interception which the other team returns for a touchdown. Instead of bringing his team 7 points (assuming the PAT) closer to victory, he's put them down 7 points (you know).

It's still early in the game, and the team can't afford to have their quarterback lose confidence. He has the ability, he just made a mistake. If he focuses on the mistake, he will inevitably make more. If he learns from the mistake, focuses on his training, and remains patient, he can surely bring his team back and win the game.

This is how I see myself. I pressed, and I got burned. It doesn't mean I can't do this. It means I still have a lot to learn about patience, ego, and trading stocks.

It's a helluva ride...

-Geoff