Looking Back To Learn

This year is a great year from equity investors. Especially for those who bought and hold since March time frame. I want to offer you my trades that went sour this year and see if we can walk away with something. Hecla Mining (HL) is the one trade that I wish I could take back. Everyone is an expert when looking back but this one got me banging my head to the wall.

I bought 400 shares of HL on 2/2 at $2.50. Two days later the stock fell to $2.23 and I cut my loss (-11.7%).  Seeing the intraday reversal, I jumped back in the stock at $2.28 then to watch it slid to $2.11. I was forced to cut my loss again at -8.5%. Painful day but I can learn.

It was then that I found day trading to be  very difficult. More so than you think especially during the heart of a bear market. Fundamental doesn't count as buyers and sellers fight to push stock up or down to their favor. My fundamental assumption of gold breaking $1,000 was right but my timing was off. Hecla is now trading north of $4.5 and that would mean doubling my money if I didn't trade around it.

But what if I didn't cut my loss? Hecla traded as low as $1.17 on 3/10. If for some reason I held on to Hecla, the collapse in price, -53% from my initial investment, would devastated me mentally.

So what can you learn from my mistake? I believe that trading is much like gambling and especially true for day trading. While cutting loss was good, I might have done better with dividend paying stocks which compensate me to wait.

Print this post