Saving your Emotional Capital $AAPL Earnings







While all the Apple bulls where having a celebration party on the move back to $610 today I could not help but wonder if they rode this stock from $644 to $555 and were just celebrating getting back to where they could have gotten out at weeks ago. My first exit was around $625 with the loss of the 5 day ema 2 weeks ago locking in another chunk of the move from $390 where I began trading this stock long. I dipped my toe in one more time at $610 per-earnings and was stopped out again the next day. Unless you are a long term investor or you trade with a huge long term view then there is no reason to hold through a 90 point decline. Where was your stop? What was your risk? What if it didn’t come back? If you knew all these things bravo, but if you expected a run up before earnings and you did not have a stop when it didn’t you are playing with fire. During the plunge when Apple traders were wasting the whole day sweating and watching the stock fall day after day I had zero stress, I was short $GRPN watching it go down day after day, my capital was still going up in the right direction not locked into apple during a free fall.

Stress, fear, hope, disappointment,  and hurt self confidence deplete our emotional capital. Preserve it by always having a stop and honoring it. There is no reason to ever go through a $90 point decline in a stock, sell it with a re-entry plan.

Never get yourself in a situation where you are trading in  a puddle of sweat hoping your stock will go back up. Conserve your emotional capital because when it is depleted you can no longer trade.