I was stopped out of the Terra Industries (TRA) position at $49.47. This was a loss of about 8.8%. A little below my stop loss target. But I hadn’t set the automatic stop loss so I had to pull the trigger myself.
I didn’t really enjoy letting go of the position. But it had to be done. TRA had bottomed out at a 15% decline from my entry price before rebounding last Friday. However, today it broke the 8% stop loss mark, per my trading plan.
Sure, I watched it and waited. Asking myself, do I mean sell if it closed down 8% or sell after an 8% decline. Well, I couldn’t lie to myself. When I wrote the rules, I intended for it to be an automatic stop loss, so it would be at the point it traded down 8% from my entry point.
We’ll see how it pans out. However, the lesson learned… it truly is difficult to admit a mistake. Time will tell if I made the right call. But the bottom line, I played by the rules.
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I am an amateur trader and investor with over 15 years experience in the stock market. I was bred to be a fundamentalist and followed fundamental analysis until 2009. Following the 2007-2008 bear market, I began to shift from a buy-and-hold strategy to trend-following techniques.