Today I lost about $185 on a daytrade and it was easily one of my best trades of the day. Someone I follow likes HTCH which I did some research and I liked it as well. I traded it a few months ago and made some money.
I bought a little HTCH on Monday and then today, I added a little more... it was holding the 50 day moving avg. and I knew they were reporting after the close today. However, about half an hour later, I got a bad feeling. The stock was now trading below the 50 day MA and I realized, looking at the chart, the stock was being dumped right into the earnings report. The more I looked, I quickly realized that someone must know the results of the upcoming earnings report and they were terrible.
I didn't hesistate. I quickly sold my shares and took a loss. About 5 minutes later HTCH was trading even lower. The stock was weak all day and finally, after hours, the results were released. A total miss. HTCH gapped down almost 10% from my sell price - saving me at least $600 in losses. This was a good read. I was looking at the HTCH yahoo! board where one poster said he added more because it was now a lot cheaper. I used to do that too. Adding to losers is a natural instinct but it rarely pays. The earnings report stunk. So why should the stock move up any time soon.
Being impatient with losers requires practice. And a willingness to admit you were wrong. It's okay to be wrong. As long as you don't end up really wrong, you can survive to fight the next day.