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Dear Ketayun,
As much as I understand your question has two part: 1) is the market about
to top (even temporary) so you can get out on the reaction with less losses
(or with gain)? 2) what to do now: sell or hold and hope for the reversal?
1. Where the market will stop nobody knows. Everyone has his (her) opinion
(for me 4000 looks like nice number to stop for some time). We all know
that market will stop and it will react, but the question is where you will
be by that time? Do you have enough capital to hold on to the any price for
the reaction? What sense does it make to hold? It may react from much
higher level and even if you sell at the bottom of the reaction it could be
much bigger loss then it is now. Plus, you will loose the opportunity to
make money and cover part or all present losses in the very next trade you
will miss while you are fighting this one.
2. On the other hand, market could reverse tomorrow and you will end up
with a huge gain. So the first thing to do is to stop bleeding. Either sell
your position (but be mentally prepare to reinstate it a second after the
closing the position if the market warrants it) or protect your position
with options (if they exist and pricing make sense). But by all means stop
the losses from getting bigger. The refusal to stop the losses and hope
that market will reverse to save you that what keels the trader.
I do know very well how you feel (no one should even dare to guess how I
get that knowledge). I wish you the very best, remember as long as you are
alive and have some capital left it will be another trade...
Yours, Alex.
At 03:00 PM 12/21/99 -0500, Ketayun wrote:
>I would appreciate any advice as to what next????? Short QQQ at 165.
>Take a loss at 175 and abort? or .......?
>
>Thank you,
>
>Ketayun Rustom
>
>
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