I don’t know what have gotten over me, suddenly I’m overwhelmed with a mortal fear that the stock market is going to crash. Whenever I have this kind of feeling creeping over me, which doesn’t happen often, I automatically liquidate my swing trade positions and raises cash which I’ve done this morning.
Why am I feeling this way? It is hard to pinpoint to any specific event. Sometimes it is a combination of events that just simply spook me unexpectedly.
I bought back in $DCTH this morning at market open due to strong open and the fact that the general market was also up. Then $DCTH went thru a fast sell-off which forced me to liquidate in order to cut my loss. No, I wasn’t about to let this one trade to take away my $DCTH gain I made in the last few days. Right after I sold, $DCTH popped right back up. Now, this type of events are quite common in the trading world and you just have to accept them and move on. Gawd know how many times I’ve to endure these events but I know this is the price I have to pay to survive in this market. Nevertheless the memory of how I’ve saved myself from countless colossal losses by acting fast encourages me to keep selling prematurely my long position to cut losses or lock in gain on my swing trade positions.
Anyway, after I sold $DCTH and witnessed the big pop up, I was irritated as usual. No big deal since this type of frustration will wear off quickly once I see another trading opportunity presents itself. But this morning, the DOW headed lower without letting up and the mini-SP500 was tracking almost breakeven for the day after opening up 7 points higher. That by itself is also not a big deal; but then I saw $PACB tracking a red bar and it just triggered something inside me.
Just like that, my mind went into panic mode and I started selling every swing trades I owned at the moment. I’ve learned to stay true to my core position trades so that I won’t be left with no position when market continues to head higher despite my panic attack. Years ago when I had these rare panic attacks, I went 100% cash and watched the market took off without me.
Well, I think the panic attack is the sign that either my body and mind have been pushed too far without sufficient rest and break or that I possess a 6th sense that forewarns me of incoming market doom.
I can tell you that the former is more likely than the latter; nevertheless there is one truism that I behold that allows me to survive and stay profitable for all these years in trading- when in doubt, move to the sideline. In time, I learn that staying on the sideline doesn’t mean I’ve to be in 100% cash; I just don’t load up like I normally do.
I’m going to heed my panic attack by taking a break to allow my body and mind to balance themselves. Time to read a good book and smell the roses.
Currently holding $LRAD, $AMRN, $USU, $SZYM, (starter position on $FAZ, $TVIX), and 51% cash.
My 2 cents.Twitter
Same feeling. Although I am still balls to the wall and 85% long. Sold my leader CX this morning. I am glad SZYM is working for you!
I say you have a healthy 85% in a bull market. Yes, it’s a nice surprise for the $SZYM run up today; at least, it has balanced my day.
I think a lot of us are with you. I’ve been about 40% long, 10% short and 50% cash for weeks…economic fundies don’t support this but the Fed has thrown a monkey wrench into standard valuation models and expectations. Can’t fight that but at some point have to wonder if 2-3% growthiness is enough. No way I’d pile all-in here.
Good to know I’m not alone. I did hesitate to publish my panic attack post but then the blog is supposed to share the ups and downs.
Thanks for the feedback!
Lol! Yes, I do have my moment of “yellow belly” once in a while.
In the world of Biotech, it is necessary since my portfolio was over-extended with biotech stocks with 11 out of my 14 positions.
Eureka! You’ve just helped me identify my sources of panic-attack. My subconscious trading mind knew this biotech overweight and prompted me to act accordingly.
Thanks again The Fly for finding the right word to reveal my source of panic attack.