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I Threw in the Towel Too Early

March 29th, 2006 by Grant in: Investing
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I made a textbook investor screw up last week: Buy High, Sell Low.

I sold both Chesapeake Energy (CHK) and Valero Energy (VLO) at the bottom of a dip.  The problem was that I couldn’t justify selling the stock, I just got impatient.  My brother convinced me to sell, even though I knew he had just done the same thing, and sold for a huge loss.

I didn’t stick to my trading plan, and it burned me.  I really didn’t lose much, but if I’d have waited a week, I would have executed my plan today, and ended up with about $1,000 profit.

The oil and gas market is volatile enough that as long as your smart about where you buy, given time, the market will swing in your favor.  It takes very little to spike the price of oil: unfavorable reserve statements, international politics, OPEC statements, etc.

Additionally, I don’t see oil prices falling anytime real soon, and even at $50 per barrel oil, oil and gas producers are doing quite well in terms of their bottom line.

Lesson learned (again):  Take the emotion out of trading, and let no one influence your trading strategies without good reason.


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