Browsing the Groupon stream this morning, I came across @RaginCajun’s essential post entitled Bad Beat in which he lays out his thinking and action around his $GRPN position in after hours on Friday on the news.
He writes,
I blew out my shares after-hours at $17, taking a dollar hit on my shares. Normally, I do not partake in after hours trading, but because we begin a new quarter Monday, I feel it is important for me to start with a clear head. Secondly, accounting issues always = sell. This is my golden rule.
My apologies to anyone following me in this trade. I am all out.
First, its so easy to trumpet winners, but I find I learn much more about the transparency and integrity of traders by how they communicate losses.
Second, young traders – there is nothing in this game more difficult and more important than managing losses. Nothing.
Please take note how the Cajun thinks through and behaves.
He takes the loss quickly and without hesitation, limits downside, sticks to his rules gained from experience no doubt, and anticipates his future emotional state well before game day on Monday.
This is how you do it kids and keep yourself in the game.
You can find the full post at the link below which you may want to print out and tape to a wall near your trading turret.
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