2022-04-20 — Walk Away, Stephen. Walk Away.

Today’s title was in reference to my day’s stock trading experience.

Oof. 😬

I started the day up like $12 in premarket trading. Then shortly after the opening of the normal day trading session, a stock surged just the way I want them to.

Over the course of the next very little while, I found myself up $1100+! (I traded the stock very well, and I also had a very very lucky accident (if only the story ended there. 😕

Here’s the accident that helped get me to I guess I was trading so quickly that I must have hit buy twice because I was lamenting that I’d missed the biggest jump of the day on that stock, only to look at the bottom of my screen and see that I was up $700 on that one trade alone! After a brief halt up I had to wait for, I sold below the asking price, just to make sure I sold it, not knowing for sure what it was going to open at when it finished. Between that and a few other trades, I was up more than I’d ever been up in a single day before!

But…

😬

Remember what I said about how so many times I sell right when it starts to go back up?

Yeah…

So after being up $1100, I took a trade and lost and was down to like $1000ish? Something like that, and then I did the next one. I got in on the trade, and I think I remember thinking, Stephen, this is where you usually see the stocks tank, but I think right as I thought that, it started to tank.

And tank it did… wow!

It crashed far and quickly.

But I was up so much on the day, and I’d had so many stocks that would go down a long way only to rebound over the course of the succeeding 10 or 20 minutes or so, and I thought to myself. I’m way way up. I’ll ride this one out, as it’s likely to go back up.

Yeah. Nope. I sold yesterday because of stocks like this one today. Sometimes they don’t rally. I thought it would, but nope. So I held tight through two tanks, and then bam! it tanked a third time, and I had to panic sell, knocking my $1100+ high for the day all the way down to like $330.

But it didn’t even end there. 😕

There was another stock that was doing what I wanted it to do, so I got in, made a few trades, and got myself to being up $420 on the day (funny… $420 on 4/20 🙃).

At that point, I actually called my mom up to me, had her take me by the hand and lead me away from the computer, after I closed the lid.

It was all supposed to end there. I was disappointed that I was down from my huge high, but $420 isn’t bad, so I was okay. I went downstairs, got food, and then I went back upstairs. Foolishly, I opened everything back up, not with the intent of continuing to trade, but just to see what happened with the stocks I’d been trading. I checked them out (seeing that the one I’d made money on right before shutting down had tanked shortly after I left it, and seeing that the other two I’d been trading were flat and… pretty much useless to trading at that point.

I watched the stocks almost as an afterthought with no inclination to jump back in and trade again. I started doing some online errand stuff, and that was all fine until I saw a stock that was down start to climb again. I was nervous about getting in, having been party to too many tanks, so it took me a little bit to get the courage to place an order again, and you know what?

Yup. Pretty much the moment I made the order, it tanked, so I sold. Then I tried again. Down more. Then I tried again, down more. I went from up $1120ish to up like $160ish.

Ouch.

Right as I was about to run out of my available money for trading for the day, there was a really good stock to trade. It was doing just what I make beaucoup dollars on.

But I traded it super poorly. I should have made probably $500 on it and made like $25 instead, all because I was scared to get in, and I tried to get in at the lowest price low it was bouncing to periodically.

Like yesterday’s penny off. It was the same story again today.

When all was said and done, I was up $188 on the day, which hurt a lot after being up more than $1100. But, it is what it is. That’s part of the learning curve. It wasn’t a red day. It was a green day. I’m making progress in my strategies and mental and emotional discipline. I made mistakes, but I was more aware and more deliberate and more calm today in what I was doing. At the end there when things were crazy, I was pretty hyped up and full of adrenaline, but overall, it felt a little better today in how I was going about it (until the end when I did some revenge trading).

Anyway, so it was a net positive, a green day, just not as green as it should have been. I need to learn to walk away. I should probably have a rule that says if I’m up x dollars, I just walk away, even if more opportunities appear to be present?

Or maybe I just need to be more careful and learn more about how I enter and exit trades.

Or maybe both.

So that was the morning/early afternoon. I sent an important email to my accountant. It was raining today, so I didn’t work on cars in the morning at all. Normally, I would take the rest of the day off on a rainy day like today, but I was feeling the money pinch with all the tax bills I put on my credit cards, so I wanted to go out and make some fundage.

Funny enough, it wasn’t a very productive car day today either. I guess I’ve had a lot of really productive ones lately, so I was due for a dud. I did four cars, billing for three. The first one was a Dodge Ram Promaster 2500 that was a crank, no start. When I got there, I checked the oil and coolant (coolant was low, and these leak, so I’m assuming it was leaking coolant). Then I went to start it up, and it sounded awful. After a few attempts, I realized that it sounded like maybe it was choking on water.

I’d seen leaks in the engine (the seal was allowing water to leak into the engine compartment, but that shouldn’t get into the intake. But what did I find? Right below probably the biggest water leak sat the air intake hose, and what did I find with the air intake hose? It was split nearly in half, right where the water was leaking in.

The upshot was that during the huge rainstorm, the leak had leaked inside the engine compartment, into the air intake hose, and it had flooded the engine. And what did that mean for his Promaster?

New engine. 😬

He’d tried to start it while it was full of water (not knowing it was full of water), and that had bent a rod. By the time I got it started, it had a nasty rod knock. 😬 Poor guy. Crazy expensive. New motor… labor, etc. Many many thousands of dollars.

All of that caused by a poorly designed seal and a poorly manufactured air intake hose.

Wow.

Second car was the freebie. A young man who I helped with his car a week or two ago still had a coolant leak, so I went back out there, and it was leaking from the radiator hose on both ends, because he didn’t put the radiator hose on correctly at either end; and it was leaking at the thermostat housing gasket, and it was leaking at the bleed screws on the thermostat housing.

So, I told him to return the thermostat housing, trade it for one that didn’t have bleed screws, buy a new gasket, and try again.

Third car was a young man who ran into troubles getting his brake booster back on after taking the old one out. I went over and helped him get it all taken care of, finding a nut in my nuts/bolts pile to replace one he lost, and getting him mostly back going before my hour was up and I was headed to the last job. That was a 1997 Toyota Land Cruiser.

The fourth and last job was a 2009 Lexus IS250 that was supposedly not starting, but as has happened now for the third time in the last three days? It started just fine when I got there. That said, it ran pretty poorly for a while, until I cleared the codes (which shouldn’t have done anything). As soon as I cleared the codes and restarted, it ran great. So I never could recreate the nostart, so I couldn’t test for that. It did have misfire codes and a rich code, but the misfires never came back, so I couldn’t test for those, and the rich code, I cleaned the MAF sensor, and that code never came back.

I don’t think I fixed the no start issue. I mean, I pretty much know I didn’t, but without being able to recreate the problem, you can’t really test for it, so… I did what I could and called it a day.

From there I went home and kind of did car number 5. My brother in law needed help with a van he’s selling, so I went over and got him taken care of, and then we chatted for a good bit before I headed home, ate dinner, and plopped my butt down to write here, which, now having done, I’ll crawl into bed.

Oh! Gratitude… (I’m trying 🙃). I’m grateful that though I was super discouraged and down on myself earlier today for not walking away when I was up so much on the day, I’m doing just fine right now. I’m grateful that I was able to get a couple of cars off my list today that have been on for a while (well, the ball is back in their courts, respectively, so it’s off my current to-do list. I’m grateful that I finally had a knowledgeable customer service rep from Fidelity. I’ve talked to their customer service people I don’t know how many times, and this was the first time I got someone who knew what he was talking about. He got all my questions answered, and that was fabulous. I learned several things. 1. The margin call I have on my account is a real call. I’d had I think three (or more) service reps tell me it was a “phantom call,” and I could ignore it. This guy was like, “No, it’s a legitimate call, and if you don’t add x dollars to your account by x day, you’re going to be penalized severely (account suspension for 6 months, I think he said?).

So… glad I talked to him today, as everyone else told me to ignore it. He also was able to tell me some things about how active trader pro worked. I’d had some questions, and he was able to answer those. And one super cool thing I learned. Trading on margin, I never trade money I don’t already own, so it only increases the number of times I can buy and sell in a day before my buying power is maxed for the day. So it actually increases it by 400%. So if I have $1000 in my trade account, and I have a margin account, I can buy up to $4000 worth of stock that day. Since I never buy more than what I personally have in cash, I’m never actually leveraged, as I’m only using my money, not using borrowed money. I just get around the t+2 rule. I can buy up to 4x my cash balance, aaaand as long as I sell all my shares before the end of the day, I pay zero interest on top of that! So… that’s cool. I was worried about borrowing money to buy stocks, and that’s not what I’m doing because I never leverage my account to buy more than what I actually have in there–meaning that if I hold $1000 in cash, I’m never going to have an open position greater than $1000. I’ll buy and I’ll sell, and that will effectively take me back to zero, and I’ll buy and sell and buy and sell, etc. And on a margin account, I can do that up to 4x my cash balance. So whereas if I were a cash-only account, I could only buy a max of $1000 of stock that day (if $1000 was my cash balance). So, 10 $100 trades, 1 $1000 trade, etc. Max total purchase of $1000 across all trades for the day. But on margin, that increases to $4000. Yes, could buy $4000 worth of stock and be debt leveraged, but I’m not going to do that. Nope. No. Nada. Never. I’m just going to take advantage of the fact that I can buy up to 4x my cash balance, and my account replenishes back to full every day.

No more t+2!!! 4x buying power and T+1!!! 🙂 Assuming I’m understanding everything correctly. 🙃

Whoops. I was going to bed.

Tangent.

Oh yeah! Grateful for that guy. Very grateful.

Love to all y’all.

Lift the World

~ stephen