PXP - took stop, loss

Thanks to BHP, I took a loss yesterday.  It really doesn't phase me, it's just a really great learning experience.  The big takeaway is that it's amazing how news can really affect the market.

One simple takeover can move a sector so incredibly much.  But you know what, that's all part of trading.  There's NOTHING you can do about news.  When news hits, then it's either going to POSITIVELY affect your trade, NEGATIVELY affect your trade, or have NO affect on your trade.  It is what it is.

I always keep my portfolio risk exposure relatively low on each trade - EXACTLY for reasons like yesterday.  If I had purchased 10 Option Contracts, then I would have gotten hurt.  But, due to my account size, I keep my buys at 1-2 Option Contracts.  And, I always figure worst case scenario.

I always think of how bad it would "hurt" if I lost the entire option value.  This way, no matter what happens, my portfolio won't get hurt.  This is called "Portfolio Management". I'm not going to go into the depths of it now, but the gist of it is to keep each trade's risk only equal to a very small portion of your entire portfolio.  This way one bad trade won't hurt you.

Let's get onto the PXP chart:

I had a valid entry on Thursday, and on Friday I took my loss.  Momentum changed - obviously, so in order to protect any value left in my option, I got out.

I originally got into the trade for $1.61, and yesterday I sold the trade for $0.82, which gave me a $0.79 loss for an ROI% of NEGATIVE 49%.

No biggie, it's all part of trading.  Do you know what happened immediately after I took my loss?  I looked for my next trade to get into.  The loss doesn't affect me or my trading, I just keep on trading because I know that my trading style has an edge over the market, so the more I trade, the more my edge has a chance to work.  Just like Vegas baby!

Onward...