I'll start with an intro about myself.
About 6 years ago when I was about 16 I went to a seminar on options trading, I learnt alot but never really took it serious. Well I'm almost 22 now and have re-dedicated myself to learning technical analysis. Anyway I've spent the last few months watching the stock market, reading lots of books and paper trading.
The problem I have at the moment is that I have very little capital to start off with ($1500). I can afford to put about $800 a month into my trading account so it will take some time to get a god capital base.
So this week was my first week trading live and I only managed to get in and out of three trades. Once my capital raises that won't be a problem. My first trade was a put option on ANZ I got in on Monday and got out on Tuesday. I made a 14% profit and I was very happy with myself.
I jumped straight into another trade. Put option on WBC. This is where I made a mistake, I held onto this trade from Tuesday morning until Thursday midday. From my technical analysis i thought it was going to go down, at first it did but half way through Tuesday the stock WBC started rising. For some reason I just kept telling myself 'don't worry it will go back down' I said that to myself for the next two days even though the stock continued to slowly rise. I finally pulled the plug and closed my position at about a 26% loss.
I've been kicking myself all week. I can't believe that I let my emotions get the better of me. Part of my risk management is to close any position if I hit a 15% loss. But I just sailed straight passed that mark because my emotions kept telling me that eventually it would go my way. Anyway it's a lesson I needed to learn and I'm happy I've learnt it now when I don't have much to lose.
So on Friday morning I jumped into an ANZ call option position. At midday I closed the position for a 20% profit. I could have stayed in longer and made a little more but I hit my target of 20% and got out.
So after brokerage charges i've come out just down on what I started with. But on the positive side I've learnt more in this week doing live trades then in the past two months of paper trading. The difference between paper and live trading is huge. I understand now what people mean when they say that you have to take your emotions out of the decision process.
So hopefully next week I don't have to learn any lessons the hard way. I will update you all next week on how I'm going. Hopefully I'll will start to learn a lot more from my experiences and yours.
Sorry for the long post.