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Got stopped out of my PEM (CFD) position today. PEM is going up and down and actually trading at a nice support level now. There is a lot of volatility in the market causing some crazy movements.

 The Trade
15th May 2007 Buy 4,700 PEM @ $4.31 ($20,257.00)
30th May 2007 Sell 2,475 PEM @ $4.049 ($10,021.28)
30th May 2007 Sell 2,225 PEM @ $4.06 ($8.983.50)

Net Loss is $1,202.22 (there a $50 brokerage because my sell order got broken into two trades and interest)

Lesson:
With actually buying and selling options/CFD or Shares I’ve noticed that when you double dip (due to greed) you tend to lose out. It is better to do these sort of trades quickly in less than a week and turn it around because there is much more gain. I was actually advised by the broker to close this position out when I was up nearly $1,000 but I didn’t even though the previous support lines were broken. Its obvious the greed emotion kicked in and I was punished for it.

This is why I prefer doing spreads because when you enter a position you are usually winning, and the market can actually go against you and you still win. Your outcome horizon is fixed at the option expiry, and you know exactly how much money you can make or lose in a fixed period of time. The best part is you know what you need to do when the outcomes happen, its like having the answer before you see the questions. 

Trading options, CFD and shares requires you to monitor the shares daily and I’m just too lazy for that sort of stuff. I’m crap at timing and don’t like making quick decision on the fly especially if things changes every second. That being said, I think think CFD and options are great instrument if used together, e.g. protected CFD - I might test out some of Daniel Kertcher’s strategy for fun and see how it goes.

Thats it from me, have a good one!